21st November 2017.
Private Sector Under “No Pressure” To Raise Pay
A huge chunk of private sector firms are under no pressure at all to raise wages, according to a new survey from staffing business The Adecco Group and the Chartered Institute of Personal Development (CIPD).
The survey of more than 2,000 UK employers found that just 24 per cent of employers in the private sector are experiencing pressure to raise wages from their workforce, and 38 per cent are not feeling the heat in the slightest.
In contrast, the pressure to raise wages is much higher in the public sector, which may partly reflect the recent debate about scrapping the public sector pay cap. Almost 59 per cent of public sector organisations say they are under some or significant pressure to raise wages for the majority of the workforce.
The UK’s recent issues with productivity may account for this reluctance to raise wages, with many employers admitting in the survey that their workers recognised that the business simply couldn’t afford to pay more.
Despite many industries recently bemoaning the skills shortage in the UK, the public and private sectors claimed accessing skills was not a problem. According to the report, 29 per cent of all public and private sector employers reported skills shortages, suggesting pay pressure is unlikely to come from a lack of skills in the current labour market.
Gerwyn Davies, CIPD’s senior labour market analyst sees productivity as having a deeper impact on pay pressure than any skill shortage.
“Over time we might expect low unemployment levels to lead to increased pressure on pay, as the Bank of England has predicted. However, it’s the UK’s ongoing poor productivity growth that’s currently preventing employers from paying more, not their inability to find or retain staff.”
The research recommended that businesses create a “digital workplace” with up-to-date technology, allowing employees to work from locations outside the office while staying in touch with their team, and streamline bureaucratic processes.
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