Most companies expect wages to rise as workers are more stressed than ever

0


More than two-thirds of companies plan to raise wages in the coming year, as competition for staff intensifies.

Sixty-eight per cent of companies plan to raise wages, nearly a quarter by an increase above inflation, according to the business lobby group, the Confederation of British Industry (CBI).

Its August survey gathered responses from 422 companies, including some of the largest employers.

Concerns are growing about labor shortages and the broader recruitment challenges. Employers are increasingly concerned that despite the imminent closure of the leave scheme, which supported 1.6 million workers at the end of July, they still will not be able to fill the vacancies that have passed 1 million for the first time.

Nearly nine out of ten companies, 87%, plan to hire permanent staff this year, according to the CBI survey carried out with the recruitment firm Pertemps Network Group. This high level of competition to find employees could squeeze out small businesses or those that have suffered most from lockdowns triggered by a pandemic.

“Compensation intentions are rising across the board as companies reopen and the economy recovers,” says Matthew Percival, director of skills and inclusion at CBI. “It could be difficult, however, for businesses that have remained closed during the closures and need to recoup losses and repay debts from Covid.

“Salary increases need to be underpinned by productivity or the risk of being passed on to customers through higher prices. The government using the upcoming budget to stimulate business investment will be key to achieving this and preventing rising employment costs from hurting competitiveness in the labor market.

Rising prices, labor shortages and supply chain tensions have made headlines in recent months, threatening the pace of economic recovery from the pandemic.

The Bank of England will have to address these concerns and address the rapid rate of price increase at a meeting on Thursday. At present, the rate of inflation – the pace of price increases – exceeds the two percent target set by the central bank. Consumer prices rose 3.2% in the 12-month period ending in August, up from 2% in July, marking the largest increase on record.

Some economists now believe the BoE should stop its efforts to stimulate the economy through quantitative easing, as this could fuel price hikes too heavily. Few would expect a move towards higher interest rates before next year at the earliest.

While wages are expected to rise a lot, potentially softening the impact of price hikes, a study from the past 30 years shows workers are more stressed than ever.

Stress at work has become more common

(Resolution Foundation / Nuffield Foundation. Source: British Social Attitudes Survey)

The Resolution Foundation’s economic think tank, funded by the Nuffield Foundation, found that more employees report that work is always or often stressful. The proportion fell from 30% in 1989 to 38% in 2015, the latest year for which data are available.

According to the study, more computers, first reported on a large scale in the 1990s, appear to have played a significant role in increasing the stress experienced by workers. According to data collected in 2012, 64 percent of employees who used computers said they were working under “great stress” compared to 48 percent of those who did not use computers. This trend persisted even when taking into account the different types of work.

Stress was once again strongly correlated with high earnings, but this has become less apparent in recent years as low-paid workers have become increasingly stressed.

As the economy adjusts after the restrictions, employers seem to be trying to rethink how to approach office life. More than three-quarters of employers, 76 percent, plan to allow hybrid work, with employees working from home at least part of the time, according to the CBI survey.

Employers should take this adjustment moment to consider broader changes that could help address the problem of stress at work, according to the Nuffield Foundation.

“Improving working conditions for employees could increase job satisfaction and reduce levels of work-related stress,” says Alex Beer, welfare program manager at the Nuffield Foundation. “In addition to improving the physical and mental health of employees, better conditions could also help increase productivity.

“As many employers consider changing their workplace policies in response to the Covid-19 pandemic, this research shows why efforts to support worker well-being should be a priority. “


Share.

About Author

Comments are closed.