An overwhelming majority of businesses in the UK (96%) would like to see support from the government in dealing with the rising cost of living, as new research from Totaljobs highlights concerns about wages not rising fast enough with inflation.
Pressure on UK businesses
80% of business admit that they are worried about the impact the cost of living will have on their organisation, with the research identifying some of their biggest concerns. 48% are concerned about their own overhead costs increasing, almost two fifths (38%) are worried about staff retention levels, and over a quarter (28%) are worried about their ability to offer competitive salaries.
Government intervention
In response to these concerns, the research has identified areas where businesses would like to see some government support. Half would like to see a reduction in energy bills and measures to reduce the cost of living for workers.
Nearly half (44%) want the government to cancel the forthcoming National Insurance Contribution (NIC) hike, 40% would like to see increased financial help for workers, and almost a quarter (23%) want the government to reduce regulation.
Concerns for employees
These calls come as more than a third of workers (37%) in the UK are considering changing jobs to combat the rising cost of living, with around 830,00 workers[1] having resorted to taking on loans to fund basic living expenses. 37% of business decision makers in turn are worried about their employees’ quality of life amongst rising living costs.
The research found that while 87% plan to increase pay for employees in the next 12 months, for the majority, planned increases will fall behind the rate of inflation. The research found that those on lower incomes will be hardest hit; on average those earning below £30,000 per year expect an average salary increase of 4.4%, compared with those earning over this threshold expecting a 7.68% increase on average in the next 12 months.
Commenting on the findings, Jonathan Portes, Professor of Economics and Public Policy said, “The increase in inflation is clearly hitting workers hard and could have a knock impact on the job market. Employers are responding by raising wages, but in some sectors – especially social care and the broader public sector – this is unlikely to be enough either to preserve living standards or to avoid significant shortages of staff.
“The government needs to provide more funding urgently in the Budget to avoid further damage to essential services. More broadly, employers would like to see government doing much more to help workers directly with the cost of living and energy bills; the measures announced so far, like the £200 ‘loan’ on energy bills won’t go far enough and will only offset a small fraction of the increased costs facing workers.
“Employers favour measures that see the government doing more to help workers directly with the cost of living and energy bills; other measures that might help businesses to reduce their own costs, like reducing regulation or allowing more EU workers, are a much lower priority.”
Jon Wilson, CEO of Totaljobs added, “Vacancies have continued to grow and without the right support from government, the challenge to find talent remains to be solved. We’re already seeing an increasing number of people looking for work in different sectors as the rising cost of living prompts many to seek better paid work. This is particularly the case for essential workers or those on lower incomes.”
[1] *Figure complied by combining the 2.58% found in the survey who Strongly agree with the statements ‘As of the start of 2022, I have resorted to taking out loans to fund my basic living expenses for the first time’ or ‘During the course of the pandemic, I resorted to taking out loans to fund my basic living expenses for the first time’. National worker figure comes from ONS worker figures February 2022 Full-time, part-time and temporary workers (seasonally adjusted). These estimates are sourced from the Labour Force Survey, a survey of households.
This give the below calculation;
2.58% x 32,485,000 = 838,113 result is rounded down to the nearest 0.1 million
Data from the survey is weighted to be nationally representative, weighting figures taken from a general Omnibus audience of 2,000 respondents.
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