Be Honest about Pay Rises Employers told
Employers under pressure to give pay rises they cannot afford must be frank with staff.
Research from business consultancy firm Croner Reward revealed that just 30% of employers have given a pay rise below last year’s level, despite the economic slowdown. The research highlighted that inflation and public–sector pay deals have been strong influences on pay–award decisions.
According to CR’s business director, Andrew Walker, employers need to be open with employees and not just make pay awards that could result in the need for business cuts in the future.
“The reality is that small–business owners and managers are facing the same pressures as their staff – their tax bills are going up, their utility bills are going up and their fuel bills are going up. If they start giving higher than average pay rises now, they’re just storing up trouble for the future.”
“Economic logic tells us the numbers don’t add up.”
“Sometimes you have to go to people and say ‘This is the reality, can you get on board and help us out?’. Most employees would say they’d rather have the stability and security of a job than take the risk of no income at all.”
The research also found that most employers have made pay awards this year at the same level as last year or higher, with pay rises increasing by an average of between two and four per cent.
According to the Chartered Institute of Personnel and Development’s rewards specialist Charles Cotton, small firms which cannot afford pay rises should consider offering staff other benefits.
“Firms need to consider other areas of rewards – for example, offering more holidays, flexible working, or investment in training and development.”
“It is very important for small organisations to be transparent about the whole process of pay and why they give people the rates that they do against the economic climate they operate in. It&rquo;s about explaining what’s possible on a limited budget. The first thing to tell people is you&rquo;re paying what you can afford to pay, otherwise you&rquo;d have to make cuts.”