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High earners prioritised for cost of living pay rises

High earners are more likely to receive pay rises to match cost of living increases than lower income workers. 

Research from job website Indeed found that 20% of those earning between £100,000-£149,999, and 23% of those with an income of £150,000 were offered pay rises to match inflation for 2022.  

This is compared to just 11% of those earning below £25,000, 5% with an income of £5,000-£9,999 and 7% of those earning £10,000-£14,999.

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Jack Latus, CEO of occupational health service Latus Health, says that companies are prioritising higher earners as they are more likely to leave a company. 

He told HR magazine: "The risk of losing key players due to the current talent war has driven many businesses to take action to secure top talent.

"A quick look at the great resignation stats shows that employees in higher pay brackets are more likely to resign than those in the lower brackets, meaning that increasing packages to more senior employees is an essential play for many businesses."

Yet Latus warned employers not to be complacent about lower paid staff. 

He added: "Not providing employees the required support at this time in order to reduce outgoings, is a false economy though, and likely a short-term saving for a medium to long-term loss, because the cost of losing employees to more supportive organisations at this time will be far more costly."

Not only are the higher earners more likely to receive a pay rise, they are also being offered larger wage increases. 

Out of those earning below the £25,000 threshold, only 5% were offered a salary increase greater than the required pay rise to match inflation of 7%.

This compares to the 30% of people earning between £100,000-£149,000 who were offered a pay rise in excess of 7%, or the 31% of those earning more than £150,000.

Indeed's UK economist Jack Kennedy said: "While some workers have seen inflation-busting pay rises driven by worker shortages, the stark reality for many is that their pay simply isn’t keeping pace. 

"As well as the discrepancies between higher and lower earners’ prospects, our survey also shines a light on the human toll of spiralling costs with many people being forced into desperate positions."

Rachel King, director at HR system provider Breathe, thinks workers should start to demand more from their employers. 

She told HR magazine: "People want and expect more from their employers, and now more than ever staff will vote with their feet if a company doesn't suit them or respect their needs and boundaries.

"As costs are set to rise, firms should look beyond the basic salary offering and examine current benefits packages, too, to ensure they still add value to the lives of UK workers and are fit for purpose."