Hay Group, the global management consultancy, recently released its latest data analysis of salaries around the world. While the news is mostly positive for UK employees, who can expect an average of a 2.5% wage increase, the forecast predicts that the retailing industry will experience an under average wage increase of 2% wage.
Retailers are under strain at the moment, this is evident when wage increases are compared to other sectors of the economy. Looking at the UK by sector, subtle variations in pay emerge.
Pressured retailers are forecasting salary rises at 2%, while finance, FMCG and utilities companies all mirror the UK average of 2.5%; (the government‘s increase cap of 1% continues to impact the combined Public Sector and Not-For-Profit forecast of 2%).
Adam Burden, a consultant at Hay Group commented on the differences:
“With labour costs such a significant proportion of their overheads, it‘s not uncommon for retailers to be cautious when increasing their salary budgets. This year, pressure from discount retailers and online has led retailers to be even more cost sensitive in their bids to remain competitive. Additionally, the potential for the retail industry to face large scale equal pay claims may have encouraged companies to keep some of their salary increase budget in reserve to cover the potential cost of claims.”
“With their salary increase budgets squeezed, it‘s vital companies implement their pay reviews as effectively as they can. Employers must engage with managers and enable them to communicate pay reviews effectively with their teams so they too understand the reasoning behind the scale of their increase and continue to feel valued. Companies should take the opportunity to ensure employees understand the full value of their reward package through tools such as total reward statements. Pensions, discount schemes and insurances can all add up to a significant proportion of what employees receive.”