The UK is in the midst of one of the worst cost of living crises ever witnessed. It’s not surprising to learn that 91% of Brits report that their cost of living has increased.
The cost of essentials is going up and up. Yet at the same time, salaries aren’t moving. This means that, during some parts of 2022, the average UK worker was bringing in the equivalent of 4.5% less every month than they were the previous year.
UK inflation now stands at around 10%, with the Bank of England predicting it will be another few years before it begins to stabilise. Recent research suggests that some employees may need pay rises of at least 8% to ease their cost of living struggles, although one third of workers are looking for a pay rise of between 10% – 14%.
Pay Rises During Economic Uncertainty
Today, more than 60% of businesses are finding that requests for pay reviews and rises from their employees are growing. However, in 2022, 50% of employees reported that they had not received a pay rise over the past year, and did not expect to. It’s clear this is a situation that is difficult on both sides of the equation.
Employees are not only entitled to fair pay, but also deserve to receive a wage that enables them to afford everyday essentials such as food, clothing, and bills. On the other side of the coin, organisations are still striving to recover from the long lasting impacts of the global health crisis and are naturally wary about increasing outgoings at a time when the business landscape is more vulnerable than ever.
A failure to support employees through this difficult time is likely to result in a loss of talent. Yet pay rises aren’t the only solution. There are a few alternatives to consider which could help retain staff and boost financial confidence without raising wages.
The Case for Hybrid Working
It’s easy to look at hybrid working – a policy that enables an employee to split their working hours between the office and another location (usually the home) – as a perk. However, it could also help to ease some of the financial burden that employees are experiencing today and may even prove to be a more valuable alternative to a pay rise for businesses struggling to increase their salaries.
One study found that 85% of employees were able to save money through hybrid working. The bulk of the savings typically comes from a reduction in commuting, with experts predicting that the average employee could save £128 per month if they usually commute by car, and over £300 per month if using public transport.
Savings can also be made on childcare, with a reduced need to use childminders as children would not be unaccompanied at home. Lunch times might also be cheaper as employees can quickly whip up a homemade lunch in their own kitchen, rather than spending out on expensive premade store bought sandwiches.
So while hybrid working doesn’t directly increase an employee’s salary, it can help support them as they get themselves into a stronger, more stable financial position.
Will offering hybrid working as an alternative to pay rises really work? It seems so. Reports show that 72% of office workers would rather be offered hybrid working than a 10% pay rise, making this a fantastic way to retain talent and boost satisfaction.
