EMPLOYERS will need to focus on alternative ways to motivate staff in the coming year, with pay likely to remain a source of tension, according to employment relations service Acas.

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“The struggling economy will continue to influence Britain’s workplaces. With forecasts for continuing long-term austerity measures and a possible triple-dip we may very well see increasing tensions and conflict around pay,” said Acas eastern area director Fiona Neathey. “

“Pressure on employers to keep wage costs under control could clash with the desire by employees to catch up with the cost of living; inflation has been outstripping median pay awards for the last three years.

“If inflation and interest rates rise then this will increase wage demands. If the private sector meets these demands through increases in the level of pay settlements then the public sector could see pressure for their pay to catch up after periods of restraint.

“Motivating and engaging staff by other ways rather than pay will therefore be a challenge and may require employers to be more inventive. One way of engaging with staff may be to offer more flexible working arrangements.

“The Government is proposing to extend the right to request flexible working to everyone not just parents and carers. Acas will be producing a new code of practice and consulting on this in the new year.”

She added: “In difficult times it is even more vital to listen and engage with your workforce. Every organisation’s success is built on its people; if employers get this right then they are likely to have happier, more motivated staff and a more successful business.

“The Government recently published evidence for effective employee engagement as part of the Engage for Success movement, which Acas is a member of, ensuring that engagement is firmly on the workplace agenda for the future.”

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