More than half of the workforce feel they are underpaid as huge support has emerged for employers to intervene to ease the cost of living crisis, according to a new report by hiring platform Indeed.
With inflation at a 40-year high and fears that rising interest rates could spiral, a YouGov survey conducted for Indeed’s Future of Compensation report reveals that more than half (52%) of working Brits don’t think they are paid enough to cope in the current economic environment.
The survey of 2,500 workers found that staff within the health and medical sector were most likely to feel underpaid (64%) – even after a 3% pay rise for NHS staff was announced in July – followed by those in hospitality and leisure (61%) and legal (58%).
One in 10 respondents (9%) working in finance said they were paid “too much” – the highest of any sector.
To support themselves, 13% have asked for a pay rise and 9% have applied for a new job. Of those who asked for a pay rise as a consequence of the real earnings squeeze, 61% either received less than they requested or no raise at all.
Men were more likely to be offered a pay rise than women: 38% of women were not offered a raise when asking for one vs only 29% of men. Additionally, 12% of women have taken on additional employment on top of their main job to gain more income.
The findings indicated that 25 to 39-year-olds – typically those with young families and in earlier stages of their careers with less savings – were feeling the pressure most of all, with 20% asking for a raise and 17% looking for new employment to support them through the crisis.
More than half (53%) of respondents said they would like to see bonuses included in their benefits packages. Only 31% said they were currently offered bonuses within their benefits package. Additional holiday (41%) and private medical insurance (38%) interested significant numbers of employees.
The research also found that 76% believed that their employer should provide some level of support to staff to help them manage the crisis. So far, the most common responses from organisations have been to offer more flexible work to reduce commuting costs (33%) and pay rises (30%) followed by bonuses (17%) and money management advice (17%).
Matt Burney, senior talent strategy advisor at Indeed, said pay remained the most important driver for workers, “yet our report shows that many workers feel underpaid”. This perception could worsen as high inflation continues to eat into people’s earnings and as the macro-economic situation appears less certain, he added.
“Against this backdrop many workers are looking to their employers for support to help weather the gloomy outlook but bosses can only go so far with pay before needing to reach for other levers in a bid to attract and retain workers,” said Burney. “This becomes increasingly difficult in what is the tightest labour market on record, one where jobseekers continue to hold most of the cards.
“Encouragingly for workers, we see signs that employers are responding to these challenges by offering a range of support from increased flexibility, overtime, vouchers and financial advice to increases in pay and benefits. With no end in sight for the rising cost of living, employers will need to carefully navigate financial viability with pay and support packages that balance fiscal and recruitment challenges over the months to come.”
Further findings indicated that the north-south divide persists, with 41% of respondents in London and south of England saying the London weighting in salaries should remain vs only 28% in the rest of the UK.
The size of business also influenced viewpoints on London weighting. A third of micro-businesses (33%), those with between two and nine employees, think organisations should scrap it, while 44% of medium-sized organisations (which have 50-249 staff) said it should go.
Business size also appeared to impact whether staff felt underpaid. Almost two thirds (65%) of employees at micro-businesses said they were not paid enough. A third (34%) asked for but were declined a pay rise. As a consequence of the cost-of-living crisis, 29% secured new jobs, with 45% receiving counter offers to try to persuade them to stay – indicating that they are reacting rather than proactively looking to retain talent.
The survey found that 54% of Britons define “rich” as households earning £75,000 and over.