With inflation across a wide range of household essentials including fuel, energy and food, UK homeowners are understandably anxious about the impact on their finances heading into the new year.
The rise in the national living wage is a step in the right direction, but there is still a substantial gap between the increase in household income this will provide and the rising cost of living, which means there is likely to be a significant squeeze on household finances heading into 2022.
In-work poverty was already increasing prior to the Covid-19 (Coronavirus) pandemic, and in truth the inflationary pressures predicted to hit households in 2022 threaten to push more households below the breadline.
In a sign that big businesses are taking this issue seriously, 9,000 employers, including more than half of the FTSE 100, have committed to paying all employees and contractors in their supply chain an hourly rate in excess of the statutory minimum.
The salary inflation this will cause will mean that organisations of all sizes that wish to recruit and retain great staff will likely need to follow suit, in fact, it could lead to trouble hiring qualified, competent staff for those who do not keep up.
Of course, it is vital for organisations to remember that failing to recruit and retain talent is bad for business, after all, teams of high-performing staff members are essential for the long-term success of a business.
In an increasingly competitive market the failure to pay appropriately for talent could lead to staff shortages, causing trouble for businesses who refuse to raise salary levels in line with industry averages.
Kay Maddox-Daines is head of the school of people and culture at Arden University
