HR Solutions Newsletter - June 2023
Stephanie Pote · June 15th 2023 · read
In this issue, which can be downloaded using the link below, we look at how pay awards have been affected by the cost-of-living crisis, how focusing on ESG can assist with the recruitment and retention of staff and the implications of not following a fair procedure when dealing with disciplinary issues.
Pay Award and the Cost of Living Crisis
Analysis by XpertHR has shown that pay awards reached a 32-year high in early 2023.
Based on responses from 266 organisations across the public, private and not-for-profit sectors, 83.7% of pay awards during the 2022 calendar year were higher than those given in 2021.
In the twelve months ending in December 2022, the median pay award was 4%; however, in the three-months ending in December 2022 this was 5% and by early 2023 it had risen to 6%.
82.9% of those surveyed stated that reason for the increased pay awards was the cost of living crisis. Maintaining pay levels within the relevant industry and skill shortages in the labour market were also cited as reasons.
Organisations are predicting a median 5% pay award in 2023, although more than one in ten (11.7%) are expecting them to be worth 8% or more.
HRSolutions can provide Salary Benchmarking services, using data from over a million UK employees and filtering by job function, level, industry and geographical region to produce bespoke reports based on your needs.
The Importance of Non-Financial Rewards to Employee Engagement
Conversely, however, prospective employees are not just interested in the financial compensation on offer when considering job roles.
- According to a 2022 MetLife study, 73% of employees cite health and wellness programs (such as access to fitness facilities, gym memberships, medical screenings, etc.) as a necessity for accepting a new position
- According to the 2022 LinkedIn Global Talent Trends Report, work-life balance was the most important factor for individuals seeking a new position.
- A poll conducted by EY of 6,000 UK adults (consisting of workers, students, apprentices and those seeking work after leaving higher education in the six months previous) found that 46% wanted their employer to demonstrate a commitment to ESG (Environment, Social and Governance). This figure rose to 63% amongst those aged between 18 and 14. A fifth of those surveyed said that they had turned down a role because the prospective employer’s ESG values were not in line with their own.
Employees are increasingly driven to seek out employers who support sustainable practices. According to a survey conducted by Statista in 2001, nearly 75% of employees said that they found their job to be more fulfilling if they were given opportunities to impact positively on environmental issues. Employees who assist their employees to do this are therefore more likely to have good employee engagement.
The use of employee opinion surveys and the implementation of outcomes in response ensure that employees know that they have a voice which is being listened to. This can be backed up with reward and recognition initiatives.
Diversity, Inclusion, Belonging and Social Impact (DIBS) are also important both with implementing programmes, focus groups etc but also providing training around DIBS support in the workplace.
Employees today need to feel safe at work and to be able to trust the decisions of those who are running the business. When employees feel supported, they are more likely to give their best at work.
In the current labour market of skill shortages and competition for talent, corporate responsibility is all the more important.
Companies which excel in these areas are more likely to present an attractive employee proposition and therefore attract more candidates. The most successful employers will provide a mixture of organisation-led and employee-led programmes to encourage ESG values in the workplace.
HRSolutions can advise you on intrinsic rewards in the workplace and the introduction of ESG and DIBS policies (this also forms part of the Firm’s wider ESG offerings: ESG Advisory and ESG Audit Assurance).