According to a recent CBI report, when businesses were asked about their future plans for hiring, salaries, and making their jobs more appealing, they were mostly positive.
Nearly half of the survey participants (46%) want to give their employees a pay raise during their next salary reviews, and this pay raise will be either the same as inflation or even higher. This is an improvement on last year. A quarter of the companies (24%) plan to give pay raises that are lower than the rate of inflation. Businesses are also trying to help their employees with the rising cost of living. More than half (53%) are allowing employees to work from home to save on travel and fuel costs. About 42% are giving one-time bonus payments, and nearly one-third (32%) are speeding up salary reviews.
When it comes to the National Living Wage (NLW), almost half of the affected businesses (47%) are increasing their prices to cover the extra costs. Looking beyond 2024, more than half of the survey participants (53%) think that when deciding how much the NLW should increase, the Low Pay Commission should focus on whether businesses can afford it without raising prices and causing inflation.
Employee attraction and retention
Businesses also agree on what's most important when trying to attract and keep talented employees. They believe that paying a fair basic wage (66%), providing training and opportunities for growth (53%), and having a clear purpose and strong company values (52%) are the key elements of a good employment package.
Matthew Percival, CBI director of People and Skills, concluded: “Pay decisions in the last 12 months have been difficult for businesses and workers with companies having to put up prices to afford pay rises that still didn't match inflation. Fewer than half of companies expecting to be able to match inflation in the next 12 months suggests another difficult year ahead. Employers will need to invest heavily in relationships with their workers and trade unions to minimise disputes and maintain employee engagement. With the National Living Wage set to reach its target next year, businesses want to focus on improving productivity in all jobs and ensuring that those gains are shared with the lowest paid.”