Pressure on Pay
In April the National Minimum Wage and National Living Wage increased, with National Living Wage [ages 23 and over] increasing to £9.50 per hour. This is an increase of 6.6% which sets the benchmark and expectations for increases in wages to keep pace with Inflationary pressures in the economy, including soaring energy prices as we come out of the international pandemic and grapple with implications of the War in Ukraine.
Many local firms, especially those involved in food production, food processing and storage and the hospitality industry, tend to pay on or close to the minimum wage or national living wage, so these statutory increases will have an immediate impact on wage costs, making price increases to customers inevitable.
My company, Human Capital Department, have been working with several local companies and helping them to conduct salary surveys to establish where their pay levels sit in relation to the local market and within their industries.
There are a number of ways we can check the market using tools such as PayScale and checking Job Portals [such as CV Library and Indeed and others] to see what similar positions are being advertised.
We recently completed this exercise for a Commercial Cleaning Business but found that the data was inconclusive, Job Titles can be a bit misleading, and benefits and commissions are not always detailed on adverts, so we conducted an industry specific survey contacting direct competitors to really get a handle on pay rates as well as commission and bonus structure at management levels.
Although employees have an expectation of pay increases it is important that firms seek productivity improvements and efficiencies in return for increases in remuneration – if increases cannot be passed to customers any increases will impact profitability and are unsustainable.
With one company we are working with we have developed a Professional Development Plan [PDP] for individuals which have included targets around sales and productivity gains, and these are linked to increases in pay – linking pay to performance.
We are also regularly involved in Job Evaluation exercises comparing the relative worth of roles in the same organisation.