A recent survey reveals that most British companies are not planning to implement pay rises above inflation, despite recognising their responsibility in supporting employees amidst the ongoing cost of living crisis.
- More than 60% of senior business leaders acknowledge an obligation to assist their workers with rising living costs.
- Only 30% of surveyed businesses intend to grant pay increments exceeding inflation this year.
- The Work Foundation advocates for strategic investment in financial well-being to aid vulnerable employees.
- Industry pressures, though slightly reduced, are not translating into significant worker support measures.
A comprehensive survey conducted by the Work Foundation at Lancaster University indicates a significant disconnect between the perceived responsibilities of British employers and their planned actions. While over 60% of business leaders admit to a substantial duty to aid employees coping with the escalating cost of living, merely 30% have committed to increasing wages beyond the current inflation rate.
The survey, which targeted over 1,000 businesses, highlighted a marginal reduction in pressures on UK firms over the past 15 months. However, this easing has not been reflected in enhanced worker support, as 34% of employers remain unable to provide financial assistance in 2023.
Financial hardship persists unabated for many low-paid workers, exacerbated by the highest interest rates observed in 16 years and the Office for Budget Responsibility’s forecast that real wages will not revert to 2008 levels until 2026.
Amidst these challenges, the Work Foundation underscores the importance of investing in comprehensive financial well-being initiatives, urging firms to prioritise above-inflation pay rises for their most vulnerable staff. Ben Harrison, the Director of the Work Foundation, cautions that despite a decline in inflation, the cost-of-living crisis has merely transformed, continuing to affect specific demographics acutely.
Survey findings also reveal that one-third of businesses struggle to implement pay rises above inflation since the crisis onset. Although some companies have introduced new financial well-being measures, a significant portion still falls short, with only a scant 38% having done so over the past year.
Professor Jan Bebbington from the Pentland Centre for Sustainability in Business contextualises these findings within the framework of Sustainable Development Goals. She advocates for proactive measures to bolster workforce financial well-being, aligning with poverty reduction and improved access to adequate income.
Furthermore, the Work Foundation recommends extending government support schemes like the Household Support Fund and encourages leaders to champion job security and engage in dialogues with employees and unions to cultivate long-term, inflation-proof financial strategies.
The survey underscores a pressing need for British businesses to align their actions with their perceived responsibilities, ensuring meaningful support for employees during economic challenges.
