A new study reveals that more than half of UK businesses (53%) have seen wage costs increase over the last 12 months.
According to a study by SD Worx, 44% of employers are facing the greatest payroll challenge – rising wage pressure – even though the Office for National Statistics’ data shows that the pay growth rate has dropped to just 4.8% for the three months ending in September.
The survey also found that employer confidence in financial communications has been impacted. More than two-fifths (42%) of employers find it difficult to manage transparency in pay, and almost one-third (32%) have difficulty promoting financial well-being.
SD Worx believes that the cost pressures facing businesses are a larger issue. While they struggle with the financial strains associated with talent retention and attraction, employees also face their own cost of living challenges.
In September, the provider revealed that less than half (47%) of workers were satisfied with their salary. 49% believed their pay was competitive on the labour market. And 52% thought their pay was fair when compared to colleagues in similar roles.
The findings of the provider indicate that there is a disconnect between the salary and benefits employers can offer and the salaries and benefits employees require to survive.
Laura Miller, UK People Country Leader at SD Worx said: “The study highlights the very real effect that financial strain has on businesses.” The strain is also felt by employees, who feel ignored, under-informed or simply not in charge of their own benefits and pay packages.
She advised employers to take a more transparent and empathetic stance to reach all employees in the company, but said that this approach “must also be consistent, strategic, tailored to each individual as much as possible, and most importantly, consistent”.
Miller said: “A mix of financial benefits and non-financial ones can really boost employee satisfaction and well-being. Even the best benefits are worthless if employees don’t understand their value, or if they feel like the perks do not align with their career or personal goals. Employers must match benefits to what employees value and let them have a say in the decision making process. It builds trust and understanding, as well as a desire to remain with the company for the long term.
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