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66% of employers are considering raising pay to match inflation - what does this mean for the rest?

Journalist: Elizabeth Howlett, People Management Magazine

ended 24. January 2023

Deadline is 11.45 

Covering an embargoed release from Speakers Bureau which found that two thirds of businesses would consider raising pay to match inflation – while only 3% would take COL into account during pay reviews. 

While only a consideration, if businesses were to raise pay to match inflation, would that be sustainable, and should pay reviews take COL/inflation into account? 

Or is there a risk of this compounding the problem?

In addition, if two thirds are considering it and actually deliver, where does that leave the rest of the businesses who can't do that – how will they attract and retain talent?

3 responses from the Newspage community

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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
Businesses may consider it, but the number implementing it is a fraction of this data. SMEs cannot afford double digit pay rises whilst their cost base has increased and the economy dictates slowing demand, it’s just not realistic. Inflation will fall to near target by the summer- maybe that’s why businesses are saying they are considering inflation matching pay increases.
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Scott GallacherVerified
Director at Rowley Turton
Given today's high inflation and the current labour shortages, I struggle to see how employees can offer below-inflation rises and retain their staff. Let alone recruit new staff.
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Carla Hoppe0
Founder and CEO at Wealthbrite
Meeting pay expectations and talent retention will continue to be top priorities for HR professionals but there is a growing recognition that to deliver on these goals, more needs to be done to support employee financial wellbeing. This means spotting ways to help people manage money day to day and providing resources to build financial resilience. Pay is only one part of the equation and throwing money at the problem will only go so far as to solve people's financial problems. A better approach would combine a clear pay strategy with an embedded financial wellbeing program that uses financial education as a skills-builder, creating a culture of openness where people can find support for financially-driven anxiety and stress and a renewed focus on the in-work benefits which enable good financial habits.