While pay awards are set to hit new highs over the next year, workers may face a real-terms pay cut due to the cost-of-living crisis.
According to the recent CIPD survey of over 2,000 senior HR professionals and decision-makers in the UK, the expected median basic pay increase has risen to four per cent overall and as much as five per cent in the private sector – the largest pay increases recorded by the CIPD since it started tracking in 2012.
However, with inflation already hitting 10.1%, it will feel like a pay cut to most workers.
The CIPD is calling on employers to look at other means beyond pay to support employee financial well-being and improve job quality in the current cost-of-living crisis.
Jon Boys, labour market economist for the CIPD, commented, “The cost-of-living crisis is one of the biggest challenges facing employers today. Organisations are looking at how they can support their people while also battling rising operational costs and a tight labour market.
“Pay awards are expected to rise by the highest amount we’ve seen in our survey for ten years but it’s being outpaced by rising prices. Rather than feeling the benefit of higher pay, most will face a real-terms pay cut.
“Securing talent remains a pressing concern for organisations but it’s positive to see that many employers are looking at non-financial measures such as flexible working and job quality to attract, retain and support employees.”
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