High earners are most likely to have been offered pay increases as the rising cost of living begins to bite, according to research by the global job site Indeed.
Triple the number of those financially comfortable (19%) have been offered a pay rise to help with the increasing cost of everyday living, compared to those who are financially uncomfortable (6%).
Looking at gross household income, 11 percent of those earning below £25,000 have been offered a pay rise to support them during what has been the fastest price increase of everyday items in 30 years.
In comparison, 20 percent of those earning £100,000-£149,999 and 23 percent of those with an income of £150,000 or more having been offered a raise. In fact, only 5 percent of those with an income of £5,000-£9,999 and 7 percent of those with an income of £10,000-£14,999 have been offered an increase in wages.
Not only are higher earners more likely to receive pay increases, they are also receiving the biggest jumps in pay. For example, of those earning under £25,000 just 5 percent have been offered a salary rise greater than 7 percent to surpass inflation.
This stands in stark comparison to those earning £100,000-£149,999 where 30 percent were offered more than 7 percent, and to those earning £150,000 or more, where 31 percent were offered a pay rise greater than 7 percent.
The living crisis
One in ten (11%) UK workers are struggling to make ends meet and more than a quarter (29%) not able to afford anything beyond essentials.
Unfortunately, nearly three quarters (71%) of those struggling financially do not feel supported by their employer to manage their financial wellbeing.
Additionally, 29 percent report they often do not have money for anything beyond essentials.
According to research by Asana’s Annual Anatomy of Work Index, after two years of largely remote work and now more pressure on workers’ incomes with the rising cost of living, 62 percent of UK workers are already experiencing burnout.
Also, the research showed that one in three workers (36%) believe it is inevitable.
“The cost of living is one of the biggest concerns for Britons and while some workers have seen inflation-busting pay rises driven by worker shortages, the stark reality for many is that their pay simply isn’t keeping pace,” says UK Economist at Indeed, Jack Kennedy.
“With inflation predicted to continue to rise, more and more people face being sucked into uncertainty with low earners bearing the brunt of diminished real earnings. As well as the discrepancies between higher and lower earners’ prospects, our survey also shines a light on the human toll of spiralling costs with many people being forced into desperate positions,” adds Kennedy.
Kennedy also highlights the relevance of the pandemic in this issue: “The problem is that many companies are still emerging from the ravages of the pandemic and not all will be in a position to bump employee pay. To understand which benefits employees value and learn more about the ones that could help improve wellbeing as well as personal finances, a good place to start is by asking questions.”
What can employers do?
Indeed’s research showed that nine out of ten (90%) of those financially comfortable feel subsidising travel costs is effective at supporting staff to manage increasing outgoings, in comparison to just 54 percent of those financially uncomfortable.
Similarly, those financially stable would appreciate permission to work from home (74%) compared to 47 percent of those financially unstable.
The only workplace offering – aside from pay rises – that was valued highly and consistently regardless of financial situation, was improved benefits, such as childcare support, pensions and parental leave.
Eight out of ten (80%) of the financially comfortable and 74 percent of the financially uncomfortable felt it was effective in supporting staff to manage the rises in everyday item prices.
Sophie Wade, author of the upcoming publication Empathy Works: The Key to Competitive Advantage in the New Era of Work suggests that empathetic leaders are key to employees navigating the cost of the living crisis:
“The pandemic catalysed significant changes in workplace environments. As leaders – whether at the senior executive level or as a team manager – we had to manage our businesses with a more human-centric orientation.
“Our corporate cultures have been transitioning from transactional to experiential, elevating trust and empathy as key values, as we recognize the challenges faced by the people we employ or work alongside and their greater emotional needs.
“While we are finally emerging from the COVID19 crisis, the new cost of living crisis is having a significant impact on so many aspects of our lives. We are having to reconsider or limit how we light and heat our homes, commute to work and put food on the table with smaller pay checks as our contributions rise.”