Weekly HR Digest 12.11: Wage growth outpaces inflation, managing political differences at work & managing Gen-Z priorities and skill deficit
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Happl to see you again for another weekly update!?
This week’s digest discusses wage growth and inflation in the UK, managing political differences in the workplace following the US election and the UK budget, along with managing the skill deficit of some Gen-Z and working to their priorities.
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3 pieces of HR content from last week
1. Wage growth outpaces inflation in the UK
Link to content:
Content summary:
- UK employees are set to see real wage growth in 2025, with forecasted pay increases of 3.5% outpacing inflation for the first time since the pandemic.
- The financial services sector leads with a 5% budget increase, while charity and media sectors lag behind with 2% and 2.8% respectively.
- The National Living Wage rise of 6.7% in April 2025 exceeds average budget forecasts, pushing employers to adjust plans, especially as National Insurance Contributions are set to increase.
- Pay transparency and communication remain areas for improvement in UK firms, with only 26% of companies making salary ranges available internally, despite 68% having them in place. This gap indicates an opportunity for building trust and engagement through clearer pay practices.
Happl’s opinion piece
- This will be a great morale boost that HR should capitalise on as it’s a shift from the gloomy post-covid era of pay rises that many are used to.
- Although this is positive, real world pay increases, on average, will still lack behind inflation when taking into account total inflation since Covid.
- Financial employee benefits are some of the highest requested of all employee benefits, suggesting employees are struggling with money management or think they could improve. Discussing aspects such as inflation and how they relate to a pay increase would likely be valued by employees.
2. Managing political workplace tensions
Link to content
Content summary
- Post election political tensions can lead to workplace conflicts, with reports showing decreased morale and productivity.
- Experts suggest hiring external conflict resolution specialists or ombuds to provide a neutral, confidential space for employees to voice concerns and prevent issues from escalating.
- HR should not suppress political discussions but rather reinforce company values through conduct policies, promoting respectful and inclusive communication.
- Providing resources and training for civil discourse can support a collaborative work environment and help employees manage challenging conversations productively.
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Happl’s opinion piece
- Whilst the studies and the piece are linked to the US election, the article is fitting for political tensions arising from other happenings, such as recent UK political changes.
- Politics in the workp;lace can be difficult, but shutting conversations down often doesn’t resolve underlying issues (if there are any).
- Using the opportunity to reinforce company values and having something that all employees can rally beyond can go a long way to minimising tension in the workplace whilst also helping HR to achieve separate goals.
3. Gen-Z workers lack key skills and have different priorities
Link to content
Content summary
- Generational Skill Gaps & Preferences: Gen Z often lacks human-centric skills like communication and collaboration due to remote work’s impact during the pandemic. However, they highly value perks like educational development and flexible work arrangements.
- Supporting Growth: HR can bridge these gaps by offering learning and development opportunities tailored to younger workers’ needs, using innovative tools like AR/VR.
- Workplace Priorities: While Gen Z appreciates flexibility and growth, perks aligning with lifestyle and CSR initiatives have become crucial. Sociable teams are less important for them compared to older generations.
- Shifting Expectations: Competitive benefits packages, including intangible aspects like culture and sustainability, are now expected, sometimes outweighing salary considerations.
Happl’s opinion piece
- Changing generational ideologies can be difficult and, in truth, some battles aren’t worth the fight.
- Being able to understand what Gen-Z values whilst finding a middle ground between them and older generations should help to balance things out in the workplace.
- Additionally, using Gen-Z focused tactics (e.g. VR) to achieve your goal can be a clever way to circumvent frustration and malicious compliance.
And that's a wrap ??
Bravo, you’ve made it to the end. You should be all caught up on the hot HR topics of yesterweek.
We’ll be back on Tuesday 19th November for another weekly digest. Thanks for taking the time to read our third edition! Enjoy your working week!
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Team Happl ??