PwC has announced its most siginificant pay rise in a decade, with some employees’ pay set to increase by more than 9%.
The ‘big four’ accountancy firm said 70% of its UK workforce would receive at least a 7% uplift in wages, with 50% getting an increase of 9% or more.
It means that many employees will see their pay increase almost in line with inflation, which in the 12 months to May 2022 was 9.1%.
Starting salaries across many of PwC’s graduate programmes will also increase – and it is taking on more than 2,000 school leavers and graduates across the UK this year. Those starting in audit roles will receive a 10% uplift, while consulting graduates who begin roles in London will be offered a £33,500 starting salary – a rise of just over 8%.
PwC will invest more than £120m in the pay increases, while a further £138m will be paid in bonuses. This is in addition to the £40m it spent on pay rises and promotions in January.
Chairman Kevin Ellis said the company could not ignore pressures to increase pay as the cost of living rises and the labour market tightens.
“We know from staff surveys that base pay is particularly important to our people, given the bearing it can have on mortgages and future salary.
Cost of living crisis
“We also looked at the salaries of our entry programmes to ensure they are as competitive as possible. We’ve had record applicants for our student recruitment programmes this year, with students citing the breadth of our business and our truly hybrid working arrangements among the reasons for choosing us.
“However, we know pay will be an increasingly important consideration given rising living costs – we want to stay competitive and continue attracting the best talent and skills from across the UK. That’s why it’s important to invest now.”
As well as pressure from employees to increase pay, some businesses are facing demand from investors. Sainsbury’s is facing a shareholder resolution that demands the retailer pays all workers the ‘real’ Living Wage.
The resolution, announced by responsible investment NGO ShareAction earlier this year, has gained support from more investors including Coutts & Co, the Coal Pensions Board and Global Systemic Investors, as well as Legal & General, Nest, and Brunel Pension Partnership.
ShareAction claimed that Lidl, Aldi and M&S already paid higher wages than Sainsbury’s, while recent announcements from Asda and Morrisons means that soon they too will pay higher wages.
Shareholders are set to vote on the resolution at Sainsbury’s AGM on 7 July.
Rachel Hargreaves, campaigns manager at ShareAction, said: “There is no excuse for a highly profitable company with multimillion pound executive salaries refusing to guarantee all its staff, including subcontracted workers, a basic standard of living. Not only is the moral case compelling, there is a clear business case for employers.
“Further, low pay drives inequality which slows economic growth and stokes instability, presenting material risks to investors. We expect investors to support this resolution. The country will be watching closely to see how they vote.”
According to Willis Towers Watson’s financial wellbeing study of more than 4,000 UK employees, a third living month-to-month without any spare cash for emergencies or shocks, with a quarter struggling financially.
Stewart Patterson, director for LifeSight, WTW’s DC master trust, said: “It’s clear that for many workers, despite being in full-time paid employment, meeting day-to-day financial demands is a challenge. High levels of inflation mean that the cost of living has been rising, and this is only likely to continue over the course of the year.
“We know that financial problems are strongly connected to other issues including anxiety, health problems, loneliness and lower performance at work, and so many employers are looking at ways to ease the burden on their employees. This can include tools and suppprt designed to help with budgeting and financial planning, as well as flexible ways in which employee benefit budgets can be used to help those struggling in the short term.”