Companies offer perks to offset cost of living crisis

A fifth of companies are giving staff extra benefits such as shopping vouchers, free parking and travel subsidies to help with the cost of living, according to a national survey of UK businesses, but most are still only offering below inflation pay increases.

According to a poll conducted for the Financial Times by the Chartered Management Institute of more than 1,000 managers at companies and public sector organisations, only one in 10 said they had offered a pay rise of more than 5 per cent to their staff this year. A similar number had offered no basic pay increase at all.

A third had offered wage increases of 3-5 per cent, with a similar number below that level.

Inflation measured by the consumer price index rose more than 10 per cent year on year in September, squeezing many households as wage growth remains comparatively low.

Companies are coming under pressure from their staff to increase wages to match the costs they are facing at home as the price of groceries and energy soars ahead of the winter.

Some employers are also offering one-off bonuses or cost of living payments.

PwC told staff on Thursday that those earning £50,000 or less a year would receive special payments of between £1,000 and £1,500 spread over the next five months to help with the cost of living. The payments will go to about half of the firm’s 24,000 staff and anyone with a salary of £40,000 or less will receive the full amount.

“Given the exceptional economic environment, extra and targeted support feels the right thing to do, and we know many of our clients are doing the same,” said Kevin Ellis, PwC’s UK chair and senior partner.

PwC and other professional services groups have announced higher than normal pay rises this year with some firms bringing forward their usual pay rises. Deloitte told staff this month that they could choose to receive extra cash payments instead of the firm’s usual contributions to their pensions.

Other companies offering one-off payments of typically between £300 and £1,000 have included Amazon, Aviva, Grainger, John Lewis, housebuilders Barratt and Taylor Wimpey and banks such as Nationwide and Co-operative. Virgin Media O2 will give £1,400 to employees earning less than £35,000.

However, the survey by the CMI showed this was still not the norm, with only a tenth of those surveyed offered one-off cost of living payments.

Twice that number said they were trying to help through giving perks such as shopping vouchers and travel subsidies. John Lewis, for example, is also offering free food to all workers until 6 January to help with the cost of living. Aviva has scrapped car parking charges for its staff.

“The squeeze on real incomes is hitting millions of households. Businesses are feeling the squeeze too. We are seeing many employers coming up with innovative means of softening the impact of the current situation on their employees beyond basic pay such as cash off on shopping and one-off in-year payments,” said Anthony Painter, director of policy, CMI.

“Overall though, there is a sense of muddling through what everyone will hope is the worst of the crisis. We are nowhere near out of the woods yet.”

Large organisations were found to be more likely to offer basic pay awards than smaller rivals, the CMI found.

If pay awards were offered to some employees only, it was more likely in the private sector than public, while additional remuneration and benefits were also offered more often in the private sector than in the public sector.