A recent CIPD Reward Management Survey for 2013* has revealed that more than half of the employers who were surveyed expected their pay budgets to increase by the end of 2013. With the backdrop of redundancies, pay freezes, increased part-time working and bonus cutting which are all still visible in the economy, the result perhaps comes as a surprise.
So, is this the start of a more positive outlook for businesses and for jobs? It is possibly too soon to tell, but what can be revealed is where the potential growth, if it occurs, is projected to arise from. Firstly, organisations foresee a rise in general wages, perhaps not to the percentage levels which were commonplace prior to the start of financial crisis but an emergence from pay-cut and freeze times nonetheless. Secondly, organisations are also looking to increase the linkages between additional pay and individual performance, to try to ensure any increases are more fairly distributed (through the implementation of robust objectives and scoring mechanisms). Thirdly, businesses anticipate some growth in head-count to account for further increases in costs and the latter prediction tallies with the present British government’s view that the overall growth rate is at last set to rise.
What about predictions in relation to employee benefits though as reward is made up of other factors, not just pay. The CIPD survey suggests that organisations expect to continue to need to pay for benefits which are appreciated by most employees (pensions, healthcare and medical insurance) and expect overall benefits costs to rise as employee numbers go up and pension auto-enrolment comes into play. In addition though, employers also believe that less obvious employee benefits have increased in importance for employees and the most prevalent one is the changing attitude of (some) employers to flexible working practices.
If the report is right, there are some interesting times ahead. Employers may need to battle to restrain costs and consider more flexibility at work whilst their competitors and perhaps also their employees start to grasp some of the growth opportunities out there which could emerge.
(*source: www.cipd.co.uk 06/06/13)