The current employment landscape has been changing for some time, and not just because of our formal departure from the European Union on 31 January 2020. In recent years, we have seen a notable change in how companies operate. Companies are no longer simply hiring candidates, they are focusing on the employee and their wellbeing.
With this shift in a sense of responsibility towards the individual employee, employers now often offer attractive packages to employees, some of which may include healthcare plans, gym memberships and additional annual leave.
Although employment is on the rise, it still remains below its pre-pandemic level. There has, however, been a recent surge in job vacancies, as published by the BBC last week. The current novel situation sees job vacancies outpace employment rates. This is largely the result of a reduction in the size of the UK workforce due to the impact of Brexit, retirement, and an increase in long-term sickness. The Chartered Institute of Personnel and Development’s (CIPD) quarterly Labour Market Outlook published earlier this month notes that 45% of employers have hard-to-fill vacancies. The CIPD found that 44% of employers have responded by increasing pay, 39% of employers have responded by upskilling existing staff, and 38% have responded by advertising more jobs as flexible.
Despite all the seemingly great add-ons that employers generally now offer, a gym membership and additional annual leave will unfortunately not pay for the increasing costs that employees now face due to the cost of living crisis.
In light of the current cost of living crisis, and companies’ newly developed sense of responsibility for their employees, it is apparent that many companies are offering increased flexibility and financial assistance as a conscious effort to help relieve some of the pressures from their employees.
Many employers have continued flexible and hybrid working arrangements with employees since the Covid-19 pandemic due to the range of benefits this brings to both parties, such as saving time and costs related to commuting and office space rental costs. We discuss working from home considerations further here.
Some employers have been able to offer pay rises to their employees. However, the average pay rise consisted of a 4.2% increase between January – March 2022. For most, this has not gone far enough as UK inflation has reached an extraordinary 9% in the 12 months to April 2022, hitting a 40-year high. This has led to some conscientious employers offering further assistance, such as one-off payments in response to the return of inflation. There is concern that these salary increases given to employees could in fact cause the higher prices we are currently seeing to become entrenched in the UK.
Rather than increasing salaries of the workforce, or decreasing profit margins of companies, the government suggest that investing in training the UK workforce will lead to greater productivity, higher living standards and a more secure future. The government pledge to increase public investment in research and development by 50% and is calling on organisations to review and increase the current amount they spend on innovation and training. UK employers spend half as much as the European average training their workforce. It is therefore hoped that with greater investment in training, will come a more efficient UK workforce and a more financially secure future.