CBI boss calls on companies to pay staff more than minimum wage

In his New Year message, John Cridland will insist that firms need to offer employees the chance of progressing in their careers (Leon Neal/AFP/Getty Images)

The head of the CBI will today call for companies to start paying their staff more, saying the large number of people working for the minimum wage is a “serious challenge” that business and the Government must address.

In his New Year message, John Cridland, director-general of the Britain’s leading business lobbying group, will insist that firms need to offer employees the chance of progressing in their careers.

According to the GMB union, inflation and the rising cost of living mean that average wages have fallen by 13.8 per cent since 2008.

Mr Cridland will today acknowledge that low wages are a problem, according to a report in The Guardian.

“The recovery is taking root and business leaders have a spring in their step compared to this time last year, but this is no time to rest on our laurels,” he will say.

“As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze.

“Businesses must support employees in every part of the country to move up the career ladder, while also giving a helping hand to young people taking their first tentative steps into the world of work.”

Mr Cridland says he expects wages to start to improve in 2014.

But he warns more should be done to help hundreds of thousands of people “stuck in minimum wage jobs without routes to progressions”.

The number of workers on minimum wage is “a serious challenge that businesses and the government must address”, he adds.

The GMB’s general secretary Paul Kenny said: “Hard-pressed working people across the UK are struggling to pay their bills after years of wage declines and attacks on the living standards of families throughout the land.

“Working people deserve and need a decent pay rise to halt the drop in living standards."

Mr Cridland's remarks came as the country’s biggest online recruitment agency, reed.co.uk, predicted that 2014 will see the tide turn for the UK jobs market with the rate of growth in new vacancies overtaking job applications for the first time in five years.

Its monthly index of job opportunities stood 28 per cent higher than a year ago. James Reed, chairman, said: “The latest data shows a shift towards a candidate-led market. Employers will have to compete to attract the best talent and, after such a long period of salary stagnation, candidates will have a stronger negotiating position.”