An overwhelming number of employers are planning to increase salaries in the next 12 months, despite the cost of living crisis. According to the latest Hays Salary Guide, 95 per cent of employers intend giving a pay raise to their staff between 2023-24. This is a jump from the 88 per cent of employers from the 2022-23 financial year and 67 per cent from the year before that.
The recent inflation surge due to the increase in global commodity prices has made basic necessities such as fuel, food and transport even more expensive. This has led many employers to increase wages in order to help their employees manage the soaring costs. However, some of these wage increases may not be enough to keep up with inflation.
Around two-thirds (66%) of employers are planning to increase salaries at a rate higher than 3%, according to Hays, a much bigger increase than that experienced in 2018 (37%) and 2017 (12%). Nonetheless, workers may not find this pay-raise adequate enough, as they have experienced the highest level of inflation in decades in the midst of years of stagnant wages.
“Two-thirds of professionals claim that their current salary does not reflect their individual performance nor align to external typical salaries, with only 28 per cent being satisfied,” the report read.
With inflation driven largely by essential items seeing an annual increase of 8% for food and a 9.8% rise in housing costs, employers surveyed revealed that they planned to increase salaries below the 7.0% CPI. The majority – 53% – outlining an increase of 3-6%, while 29% proposed an increase of below 3%.