How to attract staff as inflation soars? A nice fat bonus helps
Average wage growth in Britain is not keeping pace with inflation, leaving workers facing the biggest annual fall in living standards since records began in the 1950s.
Some employers, however, are ramping up bonuses in an attempt to lure new recruits and retain existing staff, as record job vacancies intensify the battle for talent and companies work to support staff hit by dwindling spending power.
Figures from the Office for National Statistics last week showed the value of bonuses paid across the economy jumped by almost a quarter in the year to February, the highest level of one-off awards relative to basic wages since 2013.
While the biggest payouts went to bankers and accountants in the City of London after a boom year for the finance industry, the data also reveals a marked rise in retail, construction and hospitality bonuses.
In some sectors, employers are finding creative ways to attract and retain staff. Alongside a bumper 34% rise in finance bonuses, the ONS figures show payouts up by 20% in construction and by 19% in wholesale retail, hotels and restaurants.
“Bonuses are a lot higher this year than last,” said Tony Wilson of the Institute for Employment Studies thinktank. “Across the economy it’s adding about a percentage point to pay growth right now. It’s being dragged up by large bonuses in finance, but there are proportionate big increases in other industries too.”
Britain’s cost-of-living crisis hit its fourth month in February as average earnings growth, including bonuses, of 5.4% failed to keep pace with a 6.2% increase in the consumer price index. Inflation rose further in March, to 7%, and for those who didn’t get a bonus, things were far worse, with average pay up just 4%.
Workers in the public sector are
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