With a year like 2020, and the knock-on effect of COVID-19 on businesses, it’s no wonder that there is a modest outlook for pay awards over the next twelve months, with in many cases no increases at all.
For many HR departments, the financial recovery from COVID-19 will be having an impact on pay forecasts for the foreseeable future. According to XpertHR, the forecast pay rise for 2021 is 1%, but of course will be 0% in some sectors. In their Pay planning for 2021 report, XpertHR also said that the most common downwards pressure on pay in 2021 (with almost 42% of businesses stating this factor) has been company performance or ability to pay.
24% of businesses stated Brexit uncertainty would also be having an impact on pay awards in 2021, and 30% said they were facing an inability to raise prices of their products or services.
The pandemic has put additional pressure on businesses to conduct cost-containment measures, while not necessarily being able to match offers from competitors – and when the job market does improve, how quickly will businesses be able to respond to pay pressure?
Sarah Hutley, Reward Analyst for Spinnaker, says “When money is tight, businesses are under more pressure than ever to make every penny available for pay increases count. Retaining business critical staff by offering fair pay for the job is key – as is motivating and rewarding staff who go the extra mile during these difficult times.”
“It’s also a huge opportunity to consider how salaries fit as part of a broader, total reward package too – investigating non-financial rewards that can otherwise be overlooked and undervalued.”
Spinnaker produce shore-based salary and seagoing wage reports, and is currently conducting pay increase prediction research via its salary benchmarking department which covers both shore-based and seagoing wages. Look out for announcements when we are able to share these insights with our network.
If you’d like to know more about reward, salaries, and how we can help your business navigate these waters, contact Sarah Hutley at [email protected].