A special SmartCompany poll has found that just under 70% of small business owners will give their staff pay rises this year.
But tighter economic conditions will mean that staff shouldn’t be expecting a big jump in wages. Of the employers giving pay rises, 48% said they would boost their workers’ wages by less than 5%, just enough to cover increases in mortgage repayments, food costs and petrol. Forty per cent of those employers who plan to give pay rises will increase salaries by 5% to 10%.
Of the 31.3% of respondents who do not plan to give pay rises, a staggering 88.9% blamed poor economic conditions for their decision, a clear signal that SMEs are bunkering down for a prolonged slowdown.
But two thirds of those not giving pay rises will try to keep workers happy in other ways. The most popular alternative was flexible working conditions (50%), followed by further training (44.4%), time off (22.2%) and gift vouchers (16.7%).
Those not planning to give pay rises clearly understand the ramifications of their decision, with one third expecting their staff will leave when they don’t get a salary increase.
Read more on the issues surrounding pay rises