More than two-thirds of businesses expect to raise salaries in the coming year, as competition for employees heats up.
According to business lobby group The Confederation of British Industry (CBI), sixty-eight percent of firms plan to boost pay packets, nearly a quarter of the increase in inflation.
Its survey in August drew responses from 422 companies, including some of the largest employers.
Concerns grow over labor shortages and widespread challenges in recruitment. Employers are increasingly fearful that despite the imminent closure of the furlough scheme that supports 1.6 million workers in late July, they still won’t be able to fill vacancies that have topped one million for the first time ever.
According to a CBI survey conducted with recruitment firm Pertemps Network Group, nine out of 10 companies, 87 per cent, expect to recruit permanent employees this year. This high level of competition to find employees could squeeze smaller firms or those suffering the most from the pandemic-triggered lockdown.
“As companies reopen and the economy recovers, so are the salary intents,” says Matthew Percival, director of skills and inclusion at CBI. “However, this could be challenging for businesses that remained closed during the lockdown and needed to make up for losses and pay off Covid loans.
“Wage increases need to put customers at risk through increased productivity or higher prices. A government using the upcoming budget to boost business investment will be critical to achieving this and curbing rising employment costs that hurt labor-market competition. ”
High prices, labor shortages and supply-chain tensions have been in the headlines in recent months, with the pandemic threatening the pace of economic recovery.
The Bank of England will have to face these concerns and address the rapid rate of price increase at a meeting on Thursday. Currently, the rate of inflation – the pace of price rise – is operating above the central bank’s target of two percent. Consumer prices rose 3.2 percent in the 12 months of August, up from more than two percent in July, the biggest increase on record.
Some economists now believe that the BoE should halt its efforts to boost the economy through quantitative easing, as it could push prices too high. Some expect a shift towards higher interest rates at the earliest, before next year.
While wages are set to rise for many, potentially reducing the impact of price increases, a study from the past 30 years shows that workers are more stressed than ever.
Economic think tank The Resolution Foundation, funded by the Nuffield Foundation, found that more employees report that work is always or often stressful. This ratio has increased from 30 percent in 1989 to 38 percent in 2015, the latest year for which data is available.
The study shows that more computers, which were first noted extensively in the 1990s, have played a significant role in the increase in stress workers experience. According to data collected in 2012, 64 percent of employees who use computers said they worked under “a lot of stress” compared to 48 percent of those who didn’t use computers. This trend continued even after taking into account the variety of tasks.
Stress was once more strongly correlated with higher earners, but this is less clear in recent years, with low-wage workers increasingly stressed.
As the economy adjusts after sanctions, employers are trying to rethink how to approach office life. More than three quarters of employers, 76 per cent, expect to allow hybrid working, with employees working from home at least some of the time, the CBI survey found.
According to the Nuffield Foundation, employers should use this moment of adjustment to consider broader changes that can help address the problem of stress at work.
“Improving working conditions for employees can increase job satisfaction and reduce work-related stress levels,” says Alex Beer, head of the Nuffield Foundation’s wellness program. “In addition to improving the physical and mental health of employees, better conditions can also help increase productivity.
“As many employers consider changes to their workplace policies in response to the COVID-19 pandemic, this research demonstrates why efforts to support workers’ well-being should be a priority.”
Credit: www.independent.co.uk /