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The cost of living crisis in the UK is a growing concern for many individuals and families. The rising prices of basic necessities such as housing, food, and transportation make it increasingly difficult for people to make ends meet.

Fortunately, many UK employers are seizing the initiative in challenging circumstances. According to a recent survey by Incomes Data Research, 53% of businesses in the private sector in the UK will increase wages by a minimum of 5% in 2023.

The survey, which polled 181 large employers, found that 24% of employers anticipate awarding increases of 6% or more. While 25% plan to give pay increases between 4% and 4.99%. Only 1% of business leaders indicated that they will increase employee wages between 0.1 and 1.99%, with the same amount of respondents applying salary freezes across their organisation.

The survey also found that 72% of employers believe that the salary increases in 2023 will be greater when compared to 2022. 15% of employers believe that salary increases in 2023 will likely be comparative with 2022, while only13% expect 2023 salaries to be less.

When questioned on the factors which influenced their decision to increase staff salaries in 2023, 86% of bosses said that inflation was a major contributor, 82% felt that they needed to in order to retain talent, and 68% indicated that a rise was needed to keep staff motivated and morale high. This is a significant increase from last year’s poll, where only 55% of employers cited employee motivation and morale as a major contributor to salary reviews.

In addition to this, the national living wage was also mentioned by 39% of employers and 27% suggested that the real living wage played a part in their decision to increase wages for 2023. Less than a tenth of businesses (8%) said that increased profitability was influential in the pay increase decision.

Zoe Woolacott, a senior pay researcher from Incomes Data Research, commented on the findings of the survey; “Higher inflation and increased labour market pressures proved to be the top two factors influencing pay decisions with over four-fifths of respondents citing these as one of the main influences. With inflation at 14% and the national living wage rising by 9.7% to £10.42 an hour on 1 April 2023, we may see a much higher median by the spring.”

The cost of living crisis in the UK has been a major concern in recent years, with many households struggling to make ends meet due to rising prices and stagnant wages. These findings suggest that employers are starting to take notice of this issue and are taking steps to increase pay for their employees. However, it remains to be seen whether these pay increases will be enough to keep pace with rising prices and the rising cost of living. It is also important to note that these increases only apply to employees of large private sector organisations, which may not be representative of the entire UK workforce.

Posted by: Morgan Spencer