Only a quarter of employers would offer a pay rise to their staff despite the difficulties in hiring talent, which would increase the cost of living facing the British, the research suggests.
In a quarterly survey of 2,000 employers by the Chartered Institute of Personnel and Development, only 27 percent of companies in all sectors said they were willing to raise wages in the second quarter of the year to retain or attract labor.
That’s about half – 45 percent – employers say they’re struggling to fill vacancies, and two-thirds say they expect the employment deficit to continue over the next six months. The worst recruitment problems have been reported in the healthcare, education and volunteer sectors.
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With inflation hovering at 7 percent and hurting more than 10 percent this year, families are facing a generational pressure on living expenses and the worst real income decline since the 1950s.
The institute’s survey indicates that the average salary increase in the second quarter will be 3 percent, the highest level since the report began in 2013. However, it still fell below average inflation of 9.1 percent in the second quarter, according to the Bank of England.
In the absence of bumper pay increases, the organization says employers are offering employees other incentives, such as opportunities to improve their skills or flexible work hours. “Employers are running out of steam to increase their pay, so they’re switching to keeping their focus and keeping their existing workforce happy,” said Jonathan Boyce, a labor market economist.
The pre-epidemic unemployment rate fell to 3.8 percent, adding that higher wages added to the risk of creating internally driven inflation. The bank expects unemployment to rise to 5 percent in the coming years to curb rising prices.