Rocketing inflation and its effect on the cost of living have put an unusually large spanner in the works of many a pay settlement of late. It’s one reason why, from rail workers to university staff to Post Office workers, everyone appears to have been out on strike recently.
But a 10.1% inflation rate does present some extremely difficult issues for employers. Pay anything less than 10.1% (the rate of inflation at time of writing, although that figure is expected to start falling soon) and staff receive a real term pay cut. Pay more and a) you have to somehow find a way to afford it, and b) you contribute to the inflation problem.
So what are businesses paying?
Fortunately, HR News revealed some research that gives us an idea of the pay award landscape as we head into 2023. These are the headlines:
- 91% of employees will receive a pay rise in 2023
- The most common pay increase will be 5%. 3 in 10 workers will receive this amount
- The range of pay deals is much greater than usual, with extremes being 0% and 15%. Half of all deals will be in the 3.5% – 6% range
Additionally, the FT suggested earlier in the year that employers would make greater use of bonuses to avoid inflationary (and potentially unsustainable) pay deals.
As ever, it seems employers have a difficult balance to strike.
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