As people across the country are feeling the pinch of rising costs, new research suggests UK businesses are offering support to workers where they can.
A study by advisory firm BDO showed that half of UK businesses are giving one-off bonuses to support workers through the cost of living crisis.
The survey involved 500 leaders of medium-sized businesses.
It revealed that the combination of rising energy costs, inflation and the cost of living poses the greatest challenge to most in the next six months.
More than half of the businesses interviewed said they are raising pay by between 4% and 8% with more than a quarter increasing pay by 9% or more to compensate for rising costs.
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Other support includes allowing more flexible working-from-home policies to reduce travel costs, childcare support benefits, free meals at work, or shopping vouchers.
According to the Resolution Foundation, high inflation means that average real regular pay fell by 2.8 per cent in the three months to May – the sharpest fall in real wages since records began in the early 2000s.
In June, the Office for National Statistics (ONS) reported that inflation had risen to a rate of 9.4%, which is an increase from the 9.1% recorded in May and marks a 40 year high.
Kaley Crossthwaite, of BDO, said: “The challenges facing these businesses, which are the engine of the UK’s economy, aren’t going anywhere soon.
“Inflation and rising costs have placed profound pressure on business leaders. It is particularly concerning to see businesses taking on additional loans and credit to manage costs – despite rising interest rates.
The BDO study also showed that businesses are worried about maintaining their employees despite unemployment being near an all time low.
The Resolution Foundation reports that unemployment is close to a record low at 3.8 percent.
In June, ONS data showed the number of job vacancies rose to a new record of 1.3 million between March and May.
Despite this, leaders voiced concerns about recruiting and retaining employees amid a continuing shortage of workers with almost a third of businesses struggling to find staff with the right skills.
This has led businesses to go “the extra mile” to ensure their employees are well-supported during the crisis, which is only predicted to deepen, as well as recruiting for a more diverse workforce.
Crossthwaite added: “It is encouraging to see businesses focused on increasing the inclusivity of their recruitment strategies, with many investing in apprenticeship schemes or actively recruiting from more diverse backgrounds.
“With warnings that inflation could reach 11% or higher by the end of the year and the ongoing competition for talent, businesses are going the extra mile to offer real support for employees grappling with the cost-of-living crisis.”
12 businesses offering bonuses
These medium businesses are following in the footsteps of large businesses that have publicly announced their bonus packages in the last few months.
Barclays
The banking giant Barclays has offered 35,000 staff a £1,200 pay raise to help with the cost-of-living crisis, bringing forward an annual pay review that would have taken place in March 2023.
Oxford University
This month, Oxford University has given all full-time staff a one-off £1,000 bonus with the university currently employing around 13,000 workers in total.
MoneySuperMarket
The price comparison website MoneySuperMarket is giving a one-off £2,000 payment to half its workforce this September.
Cartwright & Butler
A long-standing East Yorkshire business has announced a new, monthly additional cost of living increase for each of its 50 employees - equating to £1,800 a year.
British Airways
New staff at the major airline are offering a £1,000 sign-on bonus in a bid to attract more employees after the aviation industry suffered during the pandemic.
The payment is split into two - £500 is paid in month three after joining, and another £500 in month six.
One of the roles which includes the bonus is grounds operations agent - starting at a salary of around £25,000.
EasyJet
After months of travel chaos with cancelled and delayed flights, EasyJet is offering its cabin crew a "recognition payment" at the end of the season to recognise team members' efforts over the past few months.
Morrisons
Meanwhile, Morrisons will give 80,000 store and manufacturing staff a 2% pay rise from October, increasing its wages for those members of staff to £10.20 an hour.
After the hike, it will become the highest paying UK supermarket.
Virgin Money
The company revealed it will offer a £1,000 one-off bonus to employees earning £50,000 a year or less - this works out as 78% of its workers.
The 6,000 employees will receive the bonus in their August pay.
Lloyds Bank
Lloyd Bank is giving the majority of employees a financial boost of £1,000 in August to help them get through the cost of living crisis, the bank says.
The payment will not be made to senior management or executives and will cover 64,182 employees, or around 99.5% of the firm's staff.
Rolls Royce
Thousands of staff at Rolls-Royce will be paid an extra £2,000 to help with the cost of living crisis.
More than 14,000 workers at the aerospace giant’s UK sites in Derby and Filton, South Gloucestershire, will receive the payment, according to Sky News .
The money will be given to junior managers and shop floor workers, while some 11,000 employees at the firm’s UK manufacturing sites will also receive a 4% pay rise backdated to March.
Bloomsbury
Harry Potter publisher Bloomsbury will hand out a bonus worth 6% of salary to all its employees after the company had the best financial year in the 35-year history of Bloomsbury.
The group will make the payout to all its 1,000 staff worldwide, 700 of which are based in the UK.
HSBC
HSBC is set to pay some of its British workforce a one-off payment of 1500 pounds to help deal with the cost of living crisis, according to a memo seen by Reuters on Monday.
