3. Employers are helping employees to weather soaring living costs in creative ways
Bonus levels are set to remain steady. Preliminary findings show that 79 per cent operate a bonus scheme, 71 per cent think the number receiving a bonus will stay the same and 44 per cent expect the size to stay the same. 22 per cent think it is too early to tell whether the size will increase given the uncertainty in the market.
Therefore, the onus for many will be on benefits and how the perks they offer can reduce pressure on employees and lower employee turnover rates. When asked what employers are doing so far to help employees with the cost of living, they outlined offering financial advice and education; a staff emergency or hardship fund; interest-free loans; promoting discounts available to employees; and others outlined how they are offering one-to-ones with benefits consultants to ensure the plan is adequately tailored to their employees’ lifestyles.
Generally, there is an increased focus on the needs of the individual. Some employers have offered continued working from home in order to reduce travel costs. Elsewhere, an ongoing four-day working week trial, where staff receive a paid day off each week, reports that the experiment has resulted in no loss of productivity so far. Employers have widened their benefits packages to encompass more than the physical wellbeing of employees with private medical insurance and gym memberships – widening this out to accommodate hybrid working and leave policies that support a greater number of life events. We will investigate the full range of benefits on offer in our comprehensive survey report.
4. Business outlook returns to cautious levels
In spite of the pound falling to a record low against the dollar as the markets reacted to the UK’s biggest tax cuts in 50 years introduced by the mini budget, employers remain optimistically cautious about growth forecasts. Around one third expects business activity to stay the same.
46 per cent of respondent employers predict that their order book will increase, 43 per cent predicts that revenues will also increase and 35 per cent predict that business profitability will also increase over the next 12 months. Only four per cent predict a decrease in orders, eight per cent expect a decrease in revenue and 13 per cent expect a decline in profitability.
The government has said tax cuts are designed to stimulate the economy and they are committed to a long-term plan. Around one in six think it is too early to say what will happen to their order books, one in ten think it is too early to predict revenue levels; and one in four say it is too early to make predictions around profitability.
5. The labour market is buoyant post-pandemic
In the next six months, a greater number of respondents expect difficulties in retaining people. 87 per cent expect or have experienced retention challenges, compared to the 77 per cent in spring 2022. 87 per cent have experienced or expect recruitment problems, rising from 81 per cent in spring.
76 per cent of respondents have had to offer new recruits salaries that conflict with those paid to existing employees, with 59 per cent having to offer up to 10 per cent more and 39 per cent offering up to 20 per cent more. As always, this risks creating challenges with parity of pay internally in the organisation, raising questions around both affordability and fairness.
Around one quarter of respondents anticipate that there will be increased turnover across all employee levels, which has reduced from nearly half in spring 2022. This demonstrates the chilling effect on the labour market of reports of a recession in the UK, with the number of vacancies dropping to the lowest levels since the pandemic. Employers continue to overcome recruitment and retention challenges by making greater use of technology – for instance, LinkedIn as a recruitment tool. Many are also monitoring the results of their exit interviews.