Companies are having to salary boosts or cash incentives to retain their workforce as the cost of living crisis squeezes employees’ take-home pay.
Employers have found themselves having to offer attractive employment packages which range from traditional methods such as industry leading pay packages to more creative solutions such as trips abroad or free Prosecco on your birthday.
Britain’s workers have suffered the biggest drop in their income for nearly nine years, official figures revealed yesterday.
The Office for National Statistics (ONS) reported that basic pay dropped to minus 1 per cent and was now ‘falling noticeably in real terms’ amid rampant inflation.
And the ONS added that regular pay excluding bonuses tumbled 1.8 per cent in the three months to February when taking soaring inflation into account as measured by the Consumer Prices Index (CPI) – the steepest fall since August to October 2013.
The crisis has meant that employers are finding that staff are being poached by rival companies offering pay boosts or cash incentives who are battling to ensure they have enough staff to meet demand as the country continues to recover from Covid lockdowns.
British Airways has reportedly been luring ready-trained cabin crew members away from their rivals by offering £1,000 golden hellos for anyone who joins their team.
The airline said it is looking to hire crew members who ‘hold a current Heathrow or Stansted airside ID’ who could start working before the summer.
British Airways is offering air-ready cabin crew members £1,000 in cash as a golden hello if they join the company as it attempts to solve its staffing crisis behind flight cancellations
According to the job description, the £1,000 will be given in two parts – a first £500 after three months and the second one ‘after six months into the role.’
Sources told the Telegraph it was the company’s attempt to ‘lure’ staff away from rival airlines.
Airlines have been struggling to cope with the surge in travel demand as all Covid restrictions were dropped and the Easter holidays arrived.
Both British Airways and easyJet slashed the number of flights as they found themselves unable to staff them.
Meanwhile, restaurant bosses are finding it hard to retain waiting staff, with official figures showing the sector is short 164,000 workers in total.
Chris Galvin, co-founder of Galvin Restaurants, a collection of fine dining outlets, said he was having to increase wages by up to 20 per cent to retain staff.
He told BBC Radio 4’s Today programme: ‘Wage rises have gone through the roof, and we’re looking at somewhere between 10 and even 20 per cent at the moment.
Asked if this was because staff were threatening to quit if they didn’t get such a big rise, Mr Galvin said: ‘Yeah, it is, and to attract good talent.
Pictured: Chris Galvin, co-founder of Galvin Restaurants, a collection of fine dining outlets, said he was having to increase his employees’ wages by up to 20 per cent to retain staff
Mitchells and Butlers – which owns chains including All Bar One (above) – is offering its employees a discounted gym membership and getaways at its hotel chain Innkeepers Lodge
‘People that were demanding perhaps £30,000 before are now looking for £40-48,000. And we’re having to look at paying the going rate, and it’s a difficult market.
‘There’s far more vacancies than we’ve ever had. Hospitality has always been short of staff, traditionally we bring in people from Europe, from abroad, but we’ve never had so many vacancies ever. I think we’re probably 20 per cent down on our workforce.’
He added: ‘We’re seeing poaching on quite an intense basis now. People coming in, offering jobs – posing as customers, but they’ll tap up our waiters, tap up managers, and there’s rumours of finding smoking areas for staff and infiltrating the team there.
‘The worst thing is if they attract one, they’ll encourage colleagues. So the first time ever we’re looking at introducing gardening leave into hospitality, which is madness.
‘But to lose one is tough when you’ve spent a lot of time training and developing someone – but they’re also encouraging others to go.’
While many restaurants are offering traditional pay rises, others are coming up with alternative solutions to try and attract and retain staff.
Top chef Rick Stein told the Telegraph his restaurants now offer benefits including a free three-course meal for two at any site after a year and ‘staff surprises’ such as ‘free Stein’s at Home three-course meal boxes to enjoy at home’.
Top chef Rick Stein says his restaurants are offering free three course meals for two at any of their sites to their waiting staff as well as Pictured: Rick Stein’s seafood restaurant in Cornwall
Dishoom promises employees who stay with the company for five years the trip of a lifetime which includes a guided tour of Bombay. Pictured: Dishoom restaurant in Kensington
Brunch chain Granger & Co (pictured) offers staff a free bottle of Prosecco on their birthday
Mitchells & Butlers – which operates restaurant chains including All Bar One and Harvester – is offering discounted Pure Gym membership and money off for getaways using hotel chain Innkeeper Lodge in the UK.
Australian brunch chain Granger & Co offers employees a bottle of Prosecco on their birthday while curry chain Dishoom promises to take staff who have worked for the company for five years on a ‘once-in-a-lifetime’ trip to Bombay.
The staffing crisis has also hit the care sector as a combination of Covid and lack of agency workers has meant there are not enough staff to meet the growing demand.
Some care homes are being forced to close while others have suspended taking on new residents because they do not have safe staffing levels.
As a result, some care companies are offering welcome bonuses in a bid to lure experienced staff to join the team.
Healthcare management company HC-One is offering bonuses of up to £500 for care assistants and £750 to senior care staff while home managers could get a welcome bonus of up to £2,000.
The Priory Group, which provides private and NHS care services, is also offering welcome bonuses including £5,000 for senior nursing staff. Pictured: Priory hospital in Chelmsford
Care companies are offering cash welcome bonuses to try and plug the gap in staffing
The company announced in December it was investing £17million in a bid to ensure its pay and reward schemes were industry-leading in a bid to attract and retain experienced staff.
The Priory Group, which provides private and NHS care services, is also offering welcome bonuses including £5,000 for senior nursing staff and mental health group Elysium Healthcare is offering a welcome bonus of £5,000 for registered nurses.
It comes as Chancellor Rishi Sunak faced more economic pressure today as new jobs figures showed the impact of soaring inflation on British workers.
In February alone, real regular wages dropped 2.1 per cent which was the biggest drop since August 2013, the ONS said.
While pay rose 4 per cent in the quarter, it was far outstripped by inflation and experts have warned wages will lag even further behind rising prices this year as inflation is expected to rocket in the autumn.
The latest ONS labour market data also revealed another rise in the number of UK workers on payrolls, up by 35,000 between February and March to 29.6 million.
The Office for National Statistics said that basic pay was now ‘falling noticeably in real terms’ as the cost of living rises sharply.
But this was the smallest monthly increase since February last year while vacancies also saw the smallest rise since February to April 2021, up 50,200 at a record 1.29 million in January to March.
Darren Morgan, director of economic statistics at the Office for National Statistics (ONS), said: ‘While strong bonuses continue to mitigate the effects of rising prices on people’s total earnings, basic pay is now falling noticeably in real terms.’
There were 86,000 fewer jobless Britons at 1.3 million in the quarter to February, while those in employment rose 10,000 to 32.5 million.
More timely pay as you earn (PAYE) data showed there was another rise in the number of UK workers on payrolls last month, up by 35,000 between February and March to 29.6 million.
Chancellor Rishi Sunak holds a Q&A event at Darlington College in County Durham yesterday
But there were signs of easing demand for staff, with this marking the smallest monthly increase since February last year.
Vacancies also saw the smallest rise since February to April 2021, up 50,200, but hit another record high of 1.29 million in January to March.
And a shrinking labour market, due mostly to older workers choosing to retire early throughout the pandemic, has also seen those classed as economically inactive rise by 76,000 in the quarter to 8.9 million.
The figures come amid forecasts that inflation will peak at nearly 9 per cent this autumn, with official data on Wednesday set to show another steep rise in the CPI.
The latest data from the ONS marks the calm before the storm, ahead of April’s energy cap rise, council tax bills increase and the national insurance contribution rise.
The UK’s economic forecasters, the Office for Budget Responsibility (OBR), recently warned that households will suffer the biggest fall in real incomes since records began in 1956, with a drop of more than 2.2 per cent this year.
Official figures showed GDP increased by just 0.1 per cent as the cost of living crisis began to bite, compared to the robust 0.8 per cent seen in January
Mr Sunak said: ‘Today’s stats show the continued strength of our jobs market, with the number of employees on payrolls rising once again in March and unemployment falling further below pre-pandemic levels.’
But shadow chief secretary to the Treasury Pat McFadden replied: ‘Today’s figures show that Conservative choices are leaving real wages squeezed and people worse off.
‘At a time like this, Rishi Sunak could have chosen a one-off windfall tax on huge oil and gas company profits to cut household energy bills by up to £600.
‘Instead, he’s decided to make Britain the only major economy to land working people with higher taxes in the midst of a cost of living crisis.’
It comes after figures yesterday suggested the Uk is heading for stagflation – when costs rise but the economy does not grow in lockstep.
Official figures showed GDP increased by just 0.1 per cent in February as the cost of living crisis began to bite, worse than the 0.3 per cent anticipated and far below the robust 0.8 per cent seen in January.
The gloomy data came even before the Russian invasion of Ukraine threw the global situation into chaos and sent oil and gas prices spiralling higher.
Experts warned it is likely to be the start of a ‘prolonged period of considerably weaker growth’ – while inflation is predicted to keep rising, possibly into double digits.
Chancellor Rishi Sunak – who is struggling to contain a furore over his family’s tax affairs – welcomed the fact the economy stayed in positive territory.
But he cautioned that while the ‘robust’ response to Vladimir Putin’s aggression was right it would create ‘additional economic uncertainty’.