More than half (53%) of UK businesses have experienced an increase in wage costs in the past 12 months, new research has revealed.
The study by HR solutions provider SD Worx found that rising pressure on wages is the most urgent payroll challenge for 44% of employers – despite today’s Office for National Statistics data indicating that pay growth had dropped to 4.8% in the three months to September.
According to the survey, employer confidence in financial communication has also taken a hit, with more than two in five (42%) finding it difficult to manage pay transparency and nearly one in three (32%) struggling to promote financial wellbeing.
SD Worx believes the cost pressure facing businesses underpins a bigger issue, since while they are grappling with the financial strain associated with talent attraction and retention, employees are dealing with their own cost-of-living challenges.
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Research revealed by the provider in September found less than half of workers (47%) were satisfied with their salaries, with 49% believing their pay is competitive in the labour market and 52% thinking their pay was fair compared with colleagues in similar roles.
According to the provider, the findings indicate a disconnect between what employees need to get by and what employers can realistically offer in their pay and benefits packages.
Laura Miller, UK people country leader at SD Worx, said: “The research highlights the very real impact that financial strain is having on businesses. However, the strain is shared by employees who too often feel poorly informed, ignored or just not in control of their own pay and benefits package.”
She said employers must take a more transparent, empathetic approach to reach everyone in the business but advised that these efforts “must be strategic, personalised to individuals as far as possible and above all else consistent”.
Miller added: “A good mix of financial and non-financial benefits really helps boost employee satisfaction and wellbeing. However, even the best perks mean nothing if employees feel in the dark about their value or feel that they’re not in tune with their interests or career goals. That’s why employers must align benefits with what employees find important and give them a voice in the decision-making process. This ultimately builds trust, understanding and an appetite to stay with the company in the long-term.”
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