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Wages outstrip inflation for the first time in over a year | Consensus HR – Herts, Beds

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Wages outstrip inflation for the first time in over a year | Consensus HR – Herts, Beds

Wage growth has caught up with rising prices for the first time in nearly two years, according to Office for National Statistics (ONS) data. Regular pay, excluding bonuses, rose by 7.8% year-on-year in May to July, matching the inflation rate for the period. Darren Morgan, director of economic statistics at the ONS, said earnings continued to increase at record rates, while inflation has started to come down, meaning that real pay is no longer falling. Separate ONS data shows that the headline unemployment rate in the May-to-July period climbed to 4.3%, up from 3.8% in the previous three-month period. The number out of work is now just below 1.5m. At the same time, the number of job vacancies has dropped below 1m. Reacting to the ONS figures, Chancellor Jeremy Hunt said: “It’s heartening to see the number of employees on payroll is still close to record highs and that our unemployment rate remains below many of our international peers.” He added that while wage growth “remains high,” for real wages to grow sustainably “we must stick to our plan to halve inflation.” 

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Our HR Comment: – Wages outstrip inflation for the first time in over a year.

Matthew P Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “Some very interesting statistics in this article and the fact that ONS data shows regular pay increasing by 7.8% whilst unemployment is still very low and job vacancies dropping.

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Wages outstrip inflation for the first time in over a year | Consensus HR – Herts, Beds

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Rewards-&-Benefits

National Living Wage rising to £10.42 in April

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National Living Wage rising to £10.42 in April

Matthew Pinto-Chilcott – Owner of Consensus HR comments: “National Living Wage rising to £10.42 in April – When writing this, it is November 2022, but I believe it is best for all businesses to know well in advance what the new National Living Wage (NLW) is going to be in the next financial year, so that they can plan accordingly.  Wages / Salaries are one of the highest financial outgoings that companies face on a weekly, monthly and yearly basis and need to be fully considered and part of the plan when planning their Recruitment / Organisational structures.  Employees are what helps make a business successful but having the funds available to have them, is key to a successful business and team.  Business Owners / Managers have to ensure, as with all areas of HR and business in general that the correct measures are taken when faced with an increase in anticipated costs such as wages to ensure the growth / success of the business and motivation / culture of its team.  Failure to plan can result in a demotivated team, poor customer service and sales and believe me, it is not easy as I have found during the past 10 years and the economic difficulties businesses have had to endure.”

The National Living Wage – the legal minimum wage for workers aged 23 or over – will increase from £9.50 to £10.42 an hour in April, a rise of 9.7%. Chancellor Jeremy Hunt has also revealed that the National Minimum Wage for those aged 21-22 will increase from £9.18 to £10.18 in April; the rate for 18 to 20-year-olds climbs from £6.83 to £7.49; those under 18 will see minimum hourly pay increase from £4.81 to £5.28; and the Apprentice rate will be lifted from £4.81 to £5.28.

 

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National Living Wage rising to £10.42 in April

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pay gap

Record pay rises planned for UK but real wages lag inflation 

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Record pay rises planned for UK but real wages lag inflation 

Matthew Pinto-Chilcott – Owner of Consensus HR comments: “I found this article – Record pay rises planned for UK but real wages lag inflation from US News and the BBC very interesting bearing in mind what is going on in the economy at the moment with high inflation at 10.1 % and the war in Ukraine.  Recent statistics show that UK has seen a slight rise in unemployment to 3.6% in the three months to September, up from 3.5 in August 22.  The Bank Of England is also expecting unemployment to double by 2025 as we go through an anticipated recession.  Employers are going to have to juggle a number of balls to ensure their team are motivated and paid enough to live comfortably whilst inflation is high and that the books balance with good sales, preferably increasing, motivated team members, low sickness and the need to not have to restructure the business due to reducing salaries /’ payroll and headcount.”

ARTICLE:

UK companies are planning their biggest pay hikes in a decade, but real-term wages will still grow more slowly than inflation, according to the latest quarterly survey from the Chartered Institute of Personnel and Development (CIPD). The survey found that British employers expect to raise their basic pay rates by 4% on average over the coming year, and by as much as 5% in the private sector – the largest such increases since the CIPD’s records started in 2012. “Pay awards are expected to rise by the highest amount we’ve seen in our survey for 10 years but it’s being outpaced by rising prices,” CIPD labour market economist Jon Boys said, adding “Rather than feeling the benefit of higher pay, most will face a real-terms pay cut.” The CIPD say the UK’s jobs boom has not yet peaked, with 69% of employers planning to hire in the next quarter.

 

By Reuters – Nov. 13, 2022,  BBC, The Human Times – 15th November 2022

Record pay rises planned for UK but real wages lag inflation 

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With the current economic climate and inflation being in excess of 10%, what effect could this have your business and could we help?
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