Every little helps | Tesco ups pay for third time in a year, and your staff may soon want a raise too

Tesco ups pay for third time in a year, and your staff may soon want a raise too

Tesco is upping its workers’ pay for the third time in less than a year, amid ongoing concerns about inflation and the cost of living.

Retail trade union Usdaw announced it had negotiated a pay deal with Tesco that will see the hourly pay rate for staff in stores and fulfilment centres rise by 72p to £11.02 per hour. Around 220,000 colleagues across the UK will benefit from this increase.

The new rate will come into effect in April 2023 and represents a 7% rise in base pay. This is on top of the increases made since July 2022, to support staff facing increased costs. As a result of this deal, over 10 months, base pay will have increased by nearly 15.5%.

The new pay rates apply to staff of all ages and exceeds the national living wage, which currently stands at £9.50 an hour and is increasing to £10.42 an hour from April for those aged 23 and over. It also takes staff above the Living Wage Foundation rate outside London of £10.90 and ensures all staff in stores in London boroughs are on their rate of £11.95.
Rival supermarket Asda recently announced a 10% pay rise for its staff, with Sainsbury’s which announced an increase in January.

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Daniel Adams, Usdaw National Officer said: “This deal, which follows earlier agreements with Usdaw on additional investment outside of the normal annual negotiations and bringing the 2023 pay negotiations forward, represents a significant step forward for pay within Tesco retail. It represents a third increase in pay in 10 months and ensures that the business continues to respond positively to the significant pressures our members face. Furthermore, it demonstrates the value of employers engaging constructively with trade unions at this incredibly difficult time.”

Jason Tarry, Tesco UK & ROI CEO said: “For the second year in a row, we have made a record single-year investment in base pay for our colleagues. We know that many colleagues have felt the pressure of rising costs this year and we are absolutely committed to supporting them with competitive base pay and exclusive colleague benefits. This agreement recognises the incredible work and dedication our teams show every day in serving our customers.”

More employees considering asking for pay rises

With the cost-of-living crisis having a drastic impact on the UK population, workers around the country are calling for their employers to help.

New research from HR specialists, Remote, has revealed that Google searches for ‘how to ask for a pay rise’ have increased by 23% since last year. Data shows that on average 8,200 people per month have been searching for advice on the topic online.

In Remote’s recent survey of 2,327 employees and employers, it was revealed that many companies are trying to adjust how they work to help reduce the impact of the rising cost of living. However, only 27.4% of businesses have provided additional financial support to employees (e.g. bonus, travel paid for to work, etc.) due to the cost of living crisis. Other methods of support include flexible work arrangements, as 21.1% of employers stated they have allowed their staff to work from home more frequently to reduce costs following the cost of living crisis.

Asking for adjustments to your work or compensation can be daunting for employees. With this in mind, Remote have revealed the top 10 most difficult conversations to have at work.

Asking for a raise was revealed as the most searched for workplace question, with an average of 8,100 people Googling ‘how to ask for a pay rise’ each month. Asking for a pay rise can be a nerve-wracking experience as employees may fear rejection or feel unequipped to negotiate a new salary. It is important to be confident about your achievements and experience, and research comparable salaries to present a strong case for requesting more compensation at work.

Are pay rises the best solution to combat the cost-of-living crisis?

Many major firms have upped pay in recent weeks, partly in a bid to keep hold of staff who might otherwise be lured to competitors offering higher wages.

However, some firms’ attempts to help their staff with growing costs have not been successful, particularly if the support on offer is a one-off payment or a salary raise that's below the rate of inflation.

Unionised workers at engine maker Rolls-Royce recently rejected an offer which would have seen staff receive a one-off £2,000 bonus. Bosses at Unite the union said the move fell "far short of the real cost of living challenges which our members are experiencing".


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It could therefore be a good idea for HR leaders at other firms – who might be thinking of offering more money as a solution to employees’ current issues – to think outside the box.

And of course, there are many businesses that, no matter how much they want to, simply can’t afford to offer their staff higher pay or bonuses.

In fact, a recent study from the Chartered Management Institute (CMI) found that 48% of UK firms had no immediate plans to offer salary raises.

What are the alternatives?

Many firms are quickly throwing money at the problem, but a recent survey found a significant number of workers would prioritise a strong benefits package over a higher salary.

Research published in 2022 from global life insurance provider MetLife found that one in two employees would sacrifice more of their basic salary to get a personalised employee benefits package.

The research was conducted as part of MetLife’s Re:Me report, which looks at how the pandemic has shifted attitudes in the workplace. Among its findings was the discovery that 69% of employers said they’d work harder for an employer who provided benefits that were tailored to their individual needs.

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And they’re not looking for “soft” perks like gym membership or employee discounts (many of which, in any case, became obsolete during lockdown and the peak of the pandemic). Income protection was the 13th most desired benefit prior to the pandemic; MetLife’s research discovered that it now stands at 3rd, with a further 58% of employees stating that they’d like their benefits package to cover all their dependents, including their spouse.

There are also other steps that employers can take to help employees make their money go further. Below, Towergate Health & Protection suggested:

Salary sacrifice

Offering a salary sacrifice scheme enables employees to maximise their pre-tax income. Employees can pay a comparatively reduced price on things like childcare costs, commuting to and from work, and even their pension. If an employee is close to the higher rate income tax band, a voluntary increase in their monthly pension contribution could help them to stay within the 20% basic rate tax band.

Expert guidance

Expert guidance is often more easily, and freely, available than people realise. In fact, it may already be provided as a cost-free add-on to other health and wellbeing support. Employee assistance programmes (EAPs) often form part of the offering within other employee benefits, such as group risk benefits, and can provide confidential advice to employees on a number of concerns, including money worries.

Employee discounts

Employee discount schemes can help employees’ money to go further. Cashback cards can be made available for everything from the weekly grocery shop to clothes, DIY items, and days out. These come at a variety of costs, depending on the offer, or are sometimes even free to encourage store loyalty. Some employee discount schemes also provide access to a free credit-checking service, and money advice lines, to help employees to keep on top of their finances.



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