Almost three-quarters (73%) of small to medium enterprises (SMEs) have experienced increased demand regarding pay and benefits, while 30% have been approached by staff with concerns as to whether their pay will fit with rising living costs, according to research from WorkLife by OpenMoney.
WorkLife’s Small Business Monitor report was carried out in March 2022, among 759 senior financial and HR decision-makers among UK businesses with between five and 250 employees.
The areas in which staff had expressed a greater need for support included flexible working (32%), training and development (27%), and stress management (23%). Other common areas seeing increased demand from employees included payroll loans (16%), bikes-for-work schemes (14%) and green benefits, such as electric vehicle purchase (13%).
Only a small proportion of businesses reported that staff were asking for more fitness service discounts and gym memberships (9%), special rates on insurance (8%), or personal technology (8%).
Among the firms canvassed, 28% said they were struggling to recruit, and among these businesses, 36% cited the cost of rewarding and incentivising employees in line with their expectations as a key challenge, while 34% were concerned about meeting salary demands.
Almost a fifth (17%) of SMEs said that higher demand and expectations around pay and benefits was among the biggest challenges facing their businesses.
Steve Bee, director of WorkLife by OpenMoney, said: “It comes as no surprise to see employee remuneration and reward on so many SMEs’ minds in the current environment. Given the clear impact that recruitment challenges are having on UK businesses as a whole, establishing the right approach is crucial. But with such a wide range of benefits and support being requested by employees, deciding where any spend will have the most meaningful impact may feel daunting, particularly for those firms under financial pressure.
“At a time when rising costs may impact [organisations’] ability to increase salaries, there are a number of cost-effective benefits and training and development options that can motivate existing staff and entice new joiners, while also fostering a loyalty and commitment to the [employer] as recovery continues.”