By Andrew Walker, Reward Expert at Croner
The current economic landscape is taking a turn for the worse with stock markets falling and everyone waiting to see how it affects them individually. In the UK we are not in a double dip recession yet but the uncertain economic climate will be making all employers extremely nervous.
Many SMEs will have felt the effect in the UK of a decrease in growth in the last quarter coupled with difficulties in borrowing. With the added volatility in investment markets and the traditional holiday season, more and more pressure is being placed on profitability. After indications early in the year that some businesses are coming out of the difficult economic period that they have endured, this is the last thing any of us wanted.
Against this background it’s easy to see why employers are being more and more cautious when it comes to annual pay reviews. On the other hand, with inflation levels predicted to reach 5% in the near future employers are also going to come under increasing pressure to give a real pay increase next time around. Employees who have endured one or two pay freezes are now really feeling the squeeze of rising costs and frozen pay. Two thirds of employers in a recent survey said that Pay and Benefits was going to be their biggest workplace issue in the coming year.
So in such an unstable economy and with many conflicting pressures it is important to set your next pay review at the right level. Make sure you are up to date with the latest pay scene and also take a look at your pay and grading structures – do they reflect the shape of your business now and are they fit for the future? Getting advice from a reward expert could really help you right now, and it might not cost as much as you think!
View the latest pay settlements and forecasts for pay rewards www.cronersolutions.co.uk/Pay_Benefits
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