The latest unemployment and wage figures have been generally well received by businesses and commentators alike. Particularly well received was the fact that wages are rising at a rate of 1.9% which equates to a real term return when set against an inflation rate of zero.
Commenting on the figures IOD Chief Economist, Jim Sproule, said ‘These figures are welcome evidence that British businesses continue to power the economic recovery” adding “Crucially, IoD members tell us that they are able to increase wages because of improved corporate performance, meaning these wage increases are sustainable.”
The challenge now for the UK’s business leaders is to ensure that robust plans are in place to continue this recovery. Inflation won’t remain at zero for long and with the Bank of England still looking to take steps to move inflation back towards the 2% benchmark, sooner or later cost pressures will start to impact business plans. This though creates opportunities as well as challenges for business leaders. Productivity levels still remain lower than expected, giving leaders the chance to increase output without tying themselves into taking on additional employees until the businesses able to sustain them.
Working with employees, engaging their hearts and minds in the drive towards sustainable growth is the challenge for leaders today. The UK’s economy is growing; taking steps now to ensure that it continues to grow may be a balancing act but it is one for which leaders who engage, who empower and who enthuse are well suited.