Yahoo Finance Workers receiving pay bumps every six months
Employers are increasing their budgets for salaries and reviewing pay more frequently to keep hold of staff in a hyper-competitive jobs market.
Four in 10 employers plan to boost their pay budgets for staff, with some likely to support staff by reviewing pay twice as often as usual, according to research by consultants Willis Towers Watson.
In total, almost a third (31pc) of employers plan to help employees deal with rising inflation, the data revealed. Alasdair Wood, of Willis Towers Watson, said companies investing more in salary budgets would become more common throughout the year.
"While many companies took a ‘wait and see’ approach in the first few months of the year as inflation was expected to be short-lived, we are now seeing more and more help alleviate pressure on the lowest paid in particular," Mr Wood said.
"Examples include increasing pay budgets, accelerating pay rises, one-off adjustments and expanded use of recognition awards. If inflation stays high, we also expect higher pay budgets as we head into year-end and at the start of 2023.”
Natalie Quail, of online cosmetics brand SmileTime, said employees of the firm began requesting pay rises and cited better pay on offer at rivals.
She said: "Retaining trustworthy staff is important in this industry. So we agreed to offer them a choice of either a 10pc pay rise or a four-day working week.”
Ms Quail said spending more on salaries would be "worth it in the long run" and marked the first time in her business’s two-year history that employees had tried to haggle for better pay. "If there is a recession that will end up balancing things out. Companies like ours will end up letting go of staff."
Last week, Telegraph Money reported employers fighting are being forced to stump up tens of thousands of pounds in sign-on bonuses and other perks to win the talent war over new hires.
Some 12,000 advertised vacancies that offered "golden handshake" of up to £20,000 were listed job search engine Adzuna – up from only 5,000 the year before. Companies have been forced to be inventive in a jobs market where the number of vacancies has outnumbered the total unemployed for the first time.
Richard Vickers, of Search Consultancy, said the current wage inflation was the highest he had seen in 25 years working in recruitment.
He said: "With more jobs than candidates, the clients we work with now appreciate that they have to offer a leading-market competitive rate in terms of remuneration, and are prepared to pay a higher recruitment fee to find those candidates first. Employers don’t want to over-inflate the cost of their workforce at a false high when the market is at its peak.
"But, if they don’t proactively take care of their staff, of which financial reward is one aspect, they run the risk of high staff attrition. And the cost of replacing them is far higher than it has ever been."
