Amazon announced a pay rise of 9.8% for thousands of frontline operational employees, the Guardian reported yesterday (5 September).
The pay rise, which is set to come into play from 29 September, would lift minimum pay from between £13.50 to £14.50 an hour, based on location. This would increase to between £13.75 and £14.75 for staff with three or more years of experience.
The news follows a dispute between Amazon and the GMB trade union in July, in which the union lost a ballot to become the official union for Amazon workers. GMB has been in an ongoing dispute with the retailer over its Coventry warehouse workers, for which the union argues should be paid a minimum of £15 an hour.
Rachel Fagan, GMB organiser, commented the pay rise was “too little, too late”.
“Choosing the right time to offer a pay rise relies on a myriad of factors. These will differ from one organisation to the next, and usually from one employee to another,” said Melanie Pizzey, CEO of Global Payroll Association, a platform for payroll professionals, speaking to HR magazine.
Read more: How to give your employees a free pay rise
Pizzey noted that employees are likely to expect a pay rise as the economy recovers.
She continued: “We’ve seen the economic picture stabilise in recent months, both with the end of election uncertainty, as well as the first interest rate cut in some years as inflation has eased. So it’s not unreasonable that, with the picture brightening, some employees may feel now is the time to ask for a pay rise.
“What’s important to understand is that any improvements to the economy will take some time to filter down to the front line. Patience is a virtue in this respect, as the benefit of an improving economy may not be felt by businesses for some months yet.
“For employers themselves, it’s of course a positive to bump the pay offered, but this can’t be done at the expense of the company’s financial health.”
Nearly half (48%) of employees consider themselves underpaid, research published last month by loan company Viva Money found. A further 63% reported that they would need on average another £13,217 on top of their salary to live comfortably.
Virgile Raingeard, CEO of compensation benchmark platform Figures, suggested that employers should negotiate pay rises with employees in their annual review.
Speaking to HR magazine, he said: “At Figures, we believe that employers should proactively raise their employees’ pay, at least in line with inflation. However, the reality is that pay increases are too often a game of individual negotiation.
Read more: Half of employees can't live comfortably on salary
"For many employees, the best way to secure a raise is to build a case during the annual compensation review, which typically happens between October and March each year.
“This is a lot more complex for lower-paid workers like those at Amazon, for whom individual negotiation usually isn’t possible.”
He added that when employers are unable to offer a pay rise in line with inflation, they should consult employee representatives to negotiate the best deal for both parties.
Raingeard continued: “In this case, collective negotiations through trade unions or employee representatives are often the only way to secure a significant pay increase outside of governments raising the minimum wage.
“In an ideal world, all employers would work with employees to ensure that pay is fair. But, with inflation rising faster than pay, union involvement is often essential to ensure workers are paid fairly and able to meet the cost of living.”
