Nearly a quarter of bigger businesses increased staff wages in June – survey

Some 23% of firms with more than 10 employees reported a rise in hourly wages.

11 August 2022

Almost a quarter of bigger businesses said they had increased staff wages in June amid labour shortages and rising living costs, a new survey has shown.

The Office for National Statistics (ONS) said that businesses with more than 10 employees reported their staff’s hourly wages had risen in June compared to May.

The accommodation and food sector saw the highest level of pay growth, with 31% of businesses reporting employee salaries had increased.

Staff shortages in the hospitality industry hit record levels in June, costing the sector £21 billion in lost revenue and forcing businesses to close, trade bodies said.

Employers are more likely to raise staff salaries to overcome labour shortages and in response to its existing workforce demanding higher pay.

Some businesses have given staff a one-off payment to support them during cost-of-living rises in the past three months, the ONS report found.

Around 5% of businesses with more than 250 employees offered the lump sums to staff, compared to 1% of businesses with fewer than 250 workers.

But analysts have warned that inflation is rising at a faster rate than wages and that swathes of workers are missing out on pay rises and financial support.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “There are some signs that employers are raising wages and a significant number have made separate payments to help cover rising costs, but payments are lumpy and plenty of people are falling through the net.

“So many people have seen their wages fall significantly behind rising prices that they are turning to industrial action to put pressure on employers to close the gap.

“It’s easy to see why people are pushing for pay rises. Figures for March to May showed a record fall in regular pay once inflation was taken into account – down 2.8%.”

Signs of more employers offering payouts comes amid a wave of strikes, with workers putting pressure on their employers to deliver inflation-matching salary increases.

The ONS’s survey also found that 7% of businesses were affected by industrial action in June, jumping to 13% among transport and storage businesses.

A flurry of strikes or ballots for industrial action have been announced in recent weeks as trade unions demand employers and the Government help workers struggling with soaring costs and mounting bills.

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