As we enter 2023, the outlook looks uncertain with the onset of a recession, the return of inflation, and interest rates we haven’t seen in a decade. However, we should remain optimistic, think ahead, and prepare for what’s next.
The workforce in the UK has significantly shrunk – the reasons for this are quite complex, but factors include many over-50s leaving the workforce, the ongoing impact of the pandemic, the knock-on effect of Brexit, and skills gaps across a number of sectors.
At the end of 2022, official figures indicated that the UK's unemployment rate had edged up, while job vacancies remain near record levels. The cost of living continues to rise at its fastest rate in almost 40 years, partly due to the war in Ukraine, Covid and UK political turmoil, causing energy and food prices to continue to climb, leaving many people struggling.
Salaries in the spotlight
Official statistics show wages have risen across the board in the private sector – especially in roles where demand is high – but inflation is counteracting the impact of any increases. With the resurgence of industrial strike action likely to continue in 2023, wages have never been more in the spotlight in both the public and private sectors, and this is set to continue.
A survey of 5,000 UK workers we conducted at the end of last year, to help inform our 2023 salary guides, allows us to give you some true insight into the wants and needs of the workforce.
Over a quarter (26%) are unhappy with their current salary, with seven per cent reporting to be very unhappy with it. When asked why they are unhappy, an alarming 61% of respondents said it was because their salary had not risen in line with the cost of living.
Labour market shortages make it imperative for employers to benchmark their salary and benefits packages to stand out from the crowd and stay ahead of the game – use our guides, or speak to your local Reed specialist, to help ensure you are offering what job seekers really want.
What about benefits?
Remarkably, 28% of those surveyed said they do not receive any benefits where they currently work. Of those who do, the top three benefits people receive are flexi time (23%), annual salary increment (19%), and a company pension that is higher than the required amount (18%).
When asked what they desired when looking for a new job, 43% would find an annual salary increment to be one of the most attractive benefits followed by a four-day working week (36%), flexi time (36%), and a performance bonus (28%).
In a talent-tight market, paying the going rate or better is more important than ever. You need to be flexible when it comes to rewards and benefits, on top of making sure your employer brand is as inclusive and attractive as possible, to both potential and existing employees.
Get your offering right and you, your company, and your employees will reap the rewards and stand yourselves in good stead for what could be another turbulent year ahead.
Best wishes for the year ahead, and remember remuneration, remuneration, remuneration.
To find out what salaries and benefits you should be offering your team, download our free 2024 salary guides here.