33% of UK employers plan on increasing salaries and bonuses in 2024

increasing salariesOne-third (33%) of UK employers are planning on increasing salaries and bonuses at the start of this year, according to research by job website Totaljobs.

Its Hiring trends index, which surveyed over 1,000 UK HR decision markers, also revealed that 29% of respondents cited securing another job with higher pay as the leading factor in resignations at their organisation between October and December 2023.

The top workforce priority for employers in 2024 is improving staff retention and engagement (46%), including reviewing benefits and reward, investing in innovative technologies and offering flexible working. This was followed by improving talent attraction (27%).

While more than half (58%) were confident they will recruit the people they need this quarter, 30% admitted meeting salary expectations will be a challenge. Other concerns heading into 2024 include facing increasing pressure amid rising living and property costs (36%), staff retention (29%) and filling vacancies (21%). One-fifth (21%), however, said they have no plan to address these due to continuing economic and labour market pressures.

Three-quarters (78%) recruited during October-December 2023, and of those that did, 29% increased their hiring down from 36% in the third quarter, while 18% paused and 7% decreased. One-quarter (27%) plan to increase their recruitment efforts at the start of this year.

Julius Probst, European labour market economist at Totaljobs, said: “While inflation has fallen in the past six months, its effects continue to drive shifts in both wages and the labour market, but it is essential to recognise that money isn’t the sole factor. Keeping workers engaged and motivated is equally crucial.

“Amid broader uncertainty, employees seek roles that offer progression and opportunities for skill development. This not only enhances staff retention but also strengthens a business’ brand proposition, making it easier to hire. Recruitment and retention should go hand in hand, necessitating a review of engagement strategies and benchmarking salaries to achieve successful recruitment objectives this year.”