Wage inflation… the tipping point
As inflation gradually comes down, households are still feeling the impact of increased costs. As we approach the end of this financial year, in which employees received unprecedented pay increases as businesses had to compete to hold on to staff… is the balance of power beginning to finally shift back to a more balanced position as the labour market settles?
Staff availability continues to improve across the Midlands as some sectors have seen businesses reshaping themselves, slowing hiring, or even making redundancies. This is taking the pressure off starting salaries in particular, but will also impact business attitudes when pay reviews come back around.
In 2022/23 Company bosses made decisions to support their staff given the economic climate and as we approach pay reviews once again, they will be considering what return on investment last years’ increases delivered. So, whilst high performing employees can comfortably expect further pay rises, there are likely to be tighter performance management processes looming for others.