Yes, its that time of the year when pay reviews are on everybody’s radars and this year is a
humdinger!
Inflation will be running over 10%, it’s a dynamic employees market and emotional burn out from
the pandemic is having a heavy impact on peoples employment choices.
Unite the union are suggesting that 23% pay increase are reasonable as well as re-introducing final
salary pension schemes.
The UK economy is forecast to be, at best flat, at worst entering a recession, driven by external
factors such as energy prices and the war in the Ukraine, all of which are pushing up business costs.
In regulated sectors such as housing, the rent increases that are handed down by government will
determine your hand as to your percentage pay increases- it won’t be 23%!
We are seeing some tech and disruptors in the market paying in excess of 23% with the message
‘pay what you need to’ being cascaded to in house recruiters.
The employment market is the most dynamic we have seen in our 25 year history.
How do you balance the need and aspirations of your people with the cold economics of remaining
sustainable?
So what is the solution?
The most likely scenario is that your business cannot sustain above inflation pay increases this year.
The current ‘out of the park’ inflationary figures will themselves slow into 2023.
Many of our clients are taking a two step view this time round.
The first step is to address the spike in inflation this year, by making a non-consolidated one off
inflation balancing payment to all their people in the region of £ 500 to £ 1500, payable in October.
The second step is to understand the impact on your budgets prior to landing on a percentage rise to
be offered in 2023, when it is projected that inflation will have peaked.
What affordable looks like in your business will be unique to you. We continue to suggest that
money alone is the least ‘sticky’ element to any reward package and particularly now, with the post
pandemic emotional burn out still very prevalent.
Thinking of ways to connect to your peoples emotional well being may well have as great an impact
as agreeing unaffordable percentage pay increases in the long run.
As always, our company will be able to provide insights into how sectors are responding and at what
levels percentage increases are being set. Make sure you sign up here for our quarterly remuneration reports to keep abreast with the market.
