What’s CPI is likely to be
The latest inflation data came out last week with headline inflation decreasing 3.8% to 3.7%, and underlying CPI remaining at 3.3%.
The challenge is the ongoing conflict in the Middle East, which is driving increases in the cost of fuel and other critical inputs.
Impact on EAs and National Wage Case
There are predictions that CPI could reach 6%. Even if the CPI is in the high 4% to mid-5 % range, this will put significant pressure on employers at the bargaining table and is likely to affect the outcome of the National Wage case.
Preparation for next rounds of EAs
Employers need to start preparing themselves for these claims now.
What and how they are going to communicate to their workforces
- Impact on costs
- Headwinds facing the organisation
- General Economic Outlook
The impact on and how to mitigate during EA negotiations.
One option for organisations to consider is offering variable forms of wage increases/bonuses to avoid locking in unsustainable wage increases if major economic challenges arise. While less common in recent years, this approach has been used previously and been acceptable.
Employers need to be on the front foot on these issues.
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