Pay rises are insufficient when it comes to employee retention, new findings have suggested.

Research published by the Chartered Institute of Personnel and Development (CIPD) revealed that despite the fact that the average salary is rising, nearly half (48 per cent) of employees say they are unhappy with their pay award.

It’s report entitled ‘Employee attitudes to pay and pensions’ found that although average wage rises reached two per cent for the last two years, many workers are still feeling the pinch due to the recession.

Since 2009, average weekly earnings fell by seven per cent (using the consumer price index measure of the cost of living) or 11 per cent (using the retail price index measure of inflation).

Furthermore, nearly half (47 per cent) of employees still didn’t get a pay rise last year.

In addition, more than three-quarters of staff (76 per cent) reported that they were not informed about what they could do to get a pay rise.

Speaking about the research, Charles Cotton, performance and reward adviser at the CIPD, said: “This month is annual review time, and many employers will be spending a lot of money on increasing their employees’ pay. But to get a return on this investment our research suggests employees are more likely to be satisfied with the outcome if the organisation takes the time to explain the reasons behind it.”

The report also found that just 51 per cent of workers felt their organisation had explained the rationale behind their 2014 pay decisions. 

The research clearly demonstrates a need for firms to improve the way they communicate with staff over pay. However, another way that companies can improve morale among staff members is to offer other perks, such as flexi-time for example.

Even if the pay is not among the most competitive, allowing staff to organise schedules on their own terms is much more likely to boost loyalty over the long term.

One way in which employers can facilitate flexible working schedules is through the introduction of time and attendance technology, that can allow employers to plan rotas, monitor homeworkers and approve requests remotely.