Pay rise levels fall

Pay is predicted to rise less than the CPI in 2010, even though employees are working on average six extra hours each week.

Pay rises for UK workers are expected to be an average of 1.6% this year, but the cost of living will rise more as the consumer price index is climbing at about 2.5%, tax increases are on the cards and the weak £ is likely to push prices up too.

The  problem for employers is in the longer term if they are unable to make their staff feel valued.  When the economy does improve and the job market becomes more active, unhappy employees may well look for new opportunities.

This is a good opportunity to look at ways of maintaining morale and encouraging staff to identify with the future of the organisation.