Salaries not increasing despite cost of living crisis, studies suggest
27 September 2022 |
4:29 am
Pay rises are still falling behind despite the cost of living crisis intensifying and inflation rates going up further, analyses have shown.
[FILES] A man keeps his money in his back pocket. AFP PHOTO / PIUS UTOMI EKPEI (Photo credit should read PIUS UTOMI EKPEI/AFP/Getty Images)
Pay rises are still falling behind despite the cost of living crisis intensifying and inflation rates going up further, analyses have shown.
A survey by Aspire, which polled more than 500 candidates from a range of industries including marketing, sales, technology and creative, found that nearly half of respondents (45 per cent) had been waiting more than 12 months for a pay rise.
While a third (33.5 per cent) of respondents cited salary as the most important job factor, a similar proportion (32 per cent) also said they would look to change roles over the next year.
To this end, employers have been urged to prepare for the influx of pay rise requests as reward lags behind inflation.
Of those who had received pay rises, 46.7 per cent had received a raise of between 0 and 5 per cent: much lower than the 10.1 per cent inflation rate and also well short of the forecasted 18 per cent rate of inflation for 2023.
Commenting on the findings, chairman and founder of Aspire, Paul Farrer, emphasised that with half of the candidates not having received a pay rise in the last 12 months, “we’re seeing what many candidates see: that they stand to benefit from changing jobs right now.”
With inflation pushing up energy and fuel costs, Farrer said: “It makes sense that people are looking for new roles that offer them a competitive salary or a pay rise that can protect them from the rising cost of living.”
For this reason, he advised that employers needed to be “acutely aware and sensitive towards” how wider societal trends feed into the motivations of workers – “achieve this and employers won’t just be better placed to attract the right talent – they’ll be able to retain it too.”
In a separate survey, a veteran recruiter and co-founder of Wade Macdonald, Dominic Wade, warned businesses that they might want to “resist blanket pay rises” or “succumb to stagflation.”
He cautioned that raises “won’t equal out inflation anyway” at the risk of entering business insolvency, and resulting in further inflation.
“Employers shouldn’t be giving out increases across the board because this is inflationary in itself – it means prices have to go up and up and up, only adding to the problem further and kicking the can down the road,” he added.
Alternatively, the director of HR advice and consultancy at Peninsula, Kate Palmer, said that if employers could not offer a higher remuneration, they should “openly communicate the alternative ways they can help out their staff and find a consensus on how staff think they should be supported.
“What every employer is able to provide depends on their size and how much they can afford – while some can provide their staff with childcare vouchers and a company car, this isn’t always realistic, but there is always something you can do to help,” Palmer said.
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