Employers should look at enhancing employee benefits to keep staff

Experts have suggested that with high inflation and the prediction of a recession by the end of the year, the labour market will soon reach its peak.

And, while employers are using methods such as increasing pay to both attract and retain staff, the CIPD are warning that they may need to look at other avenues to support their worker’s financial wellbeing.

According to the CIPD’s Labour Market Outlook report, pay award expectations have hit a record high in the private sector, rising to a median of four per cent, the highest of any sector in the Labour Market Outlook’s current time series, which began in 2012. The median expected basic pay increase across all sectors continues at three per cent.

The CIPD warns that it won’t be sustainable to increase pay over the long-term, and so suggests that enhancing overall benefits packages might be the better option to keep and attract their employees.

Jonathan Boys, labour market economist for the CIPD, said, “We’re seeing some of the highest pay awards in recent history as employers strive to attract and retain staff. However, strong pay growth can’t last forever. To deal with the cost-of-living crisis, employers will have to look at other ways they can support their people. Employer benefits that help reduce the cost of housing, travel and childcare will be of particular value to those on the lowest incomes.

“Forecasts of a recession may dampen employers’ recruitment plans in time, but for now, the UK is still in the grips of a hiring boom, with nearly three in four employers planning to take on more staff. In addition to hiring new staff, employers are also taking numerous measures to keep their existing people by upskilling staff, increasing wages and improving job quality.

“Now is a good time for the government to capitalise on employer appetite for upskilling. It’s vital employers have the right support mechanisms in place to access the training they need. Reform of the apprenticeship levy could help by enabling organisations to spend the levy on training that best suits their business’s needs at this crucial time.”

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