According to Salary Survey Guide 79% of employers gave pay rises in January, but only senior staff received a pay rise above inflation.
Thee in four white-collar firms gave pay rises in January, which is a record number in 10 years, and half of employers admit to giving pay rises for cost-of-living purposes.
A quarter of large firms admit to the “fear” of bad press if they do not increase pay for their staff and the average pay rise for below-management level is just 5%, almost half of the current inflation rate.
Junior and less experienced professionals are £1,200 worse-off despite record number of pay rises.
C-suite have received pay increases of +20%, this equates to an extra £15,000 per annum and benefit packages almost doubled to £280 per employee per month as pay rises fall short.
The leading reasons for pay rises according to managers has been to support employees with cost of living, to help aid morale and retention, and for a promotion, time served, or targets had been met.
The findings come from global recruitment consultancy Robert Walters annual Salary Survey Guide 2023 – which tracks salary predictions for the coming year, as well as surveying 4,000 white collar professionals and 2,000 employers to identify upcoming workplace trends.
Chris Poole, Managing Director of Robert Walters UK said, “Historically pay rises have been used as a metric to reward hard work, loyalty, or progression.
“However, what this survey reveals is how truly unique the market is at the moment – where pay rises are now are being awarded out of necessity by employers who are fearful of not appearing as a responsible or ethical employer.”
The Robert Walters survey revealed that a quarter of large firms were fearful of public scrutiny if they did not increase wages at the start of this year – with a third of senior leaders admitting that the public-sector pay strikes in December further fuelled the private sectors decision to readdress pay ahead of the new year.
Pay increases marginal for less senior staff
Whilst cost of living may well be front-of-mind for employers, the Robert Walters Salary Survey Guide reveals that the average pay increase of 4-6% lags behind the latest ONS inflationary figure of 9.2%.
That means for the average professional salary of £35,000 – a 5% increase equates to an extra £1,750 per year. With cost of living increasing weekly by £57 – an annual increase of almost £3k – the average white-collar professional is in fact £1.2k worse off in 2023 despite the record number of pay rises.
The same cannot be said for senior managers, executives, and the leaders of an organisation – who have received increases of around 10%, 15%, and 20% respectively.
For the average senior leader at C-Suite level earning around £75k – they will earn an extra £15k this year if they receive the anticipated 20% increase.
Poole added, “It really isn’t surprising to see these types of pay increases at the senior end of the market where across all industries we have contended with an acute candidate shortage.
“In turbulent times, companies often prefer experience over potential and so the war for talent has been more pronounced at the senior end of the market – with the key attraction in these times being pay rather than company security, career longevity, or the values of a prospective employer.
“Whilst it is tempting to jump at the offer of an inflated salary at another company, we do advise professionals to approach this decision with caution. What goes up will come down. The candidate shortage is pushing up the salaries, but companies are also doing a lot of internal training and recruiting at the junior end to help plug this gap for the near future.
“When the candidate shortage levels out – which it will – companies will look at their biggest headcount costs and review whether they need to pay that price point any more. We saw similar happen in the pandemic – where the most cuts were made at mid-management level.”
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