Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

National living wageEconomics, government & businessPublic sectorPay settlementsRetention of staff

Employers cautious about pay awards in the year ahead

by Personnel Today 27 Oct 2016
by Personnel Today 27 Oct 2016 Amer Ghazzal/REX/Shutterstock
Amer Ghazzal/REX/Shutterstock

Many employees are set to see their pay eroded over the next year as inflation rises and employers keep pay awards to a minimum.

Findings from an XpertHR survey reveal that private-sector employers are planning to give their employees pay awards of just 2% over the next year. This is the same level that pay awards in the sector have been at over the past year, but above that for public-sector employees who are already subject to the Government’s policy of limiting pay increases to 1% each year.

XpertHR 2017 pay awards forecast

Forecasts for pay awards in 2016/2017: detailed analysis

ASHE 2016 data summary

By industry, employees in the construction industry are forecast to receive the highest pay rises, at 3%. At the other end of the scale, not-for-profit employers are looking to give pay rises of just 1.5%. Sectors including chemicals, utilities, engineering, retail, transport and professional services are all predicting pay awards of 2% over the next year.

Pay awards have been worth around 2% since 2012, but since December 2014 employees have been enjoying real-terms increases in pay as the value of pay awards outstripped inflation. However, retail prices index inflation is now at 2%, and is forecast to continue rising.

“The end is in sight for real-terms increases in pay; employees can soon expect to see the value of any pay award they receive eroded by inflation,” said the author of the report, XpertHR’s Sheila Attwood.

Despite employers quoting a relatively subdued figure for the likely level of their employee pay awards over the next year, they also expect to feel pressure to increase pay levels from a number of factors – including competitor pay levels, and recruitment and retention issues. Yet ongoing economic uncertainty means that pay rises are expected to remain low for the next year.

Few expect to be more generous than they were this year – less than one-fifth have said that their next pay award will be worth more than they gave employees this year, as most (61.8%) expect to make the same pay award two years in a row.

Official earnings data

XpertHR’s findings come as the latest official figures on earnings levels are released by the Office for National Statistics (ONS). The 2016 Annual Survey of Hours and Earnings (ASHE) found that weekly pay rose by 2.2% in the year to April 2016, up from 1.7% in the year to April 2015. The ONS reports that the fastest earnings growth was recorded for the lowest paid employees, due to the introduction of the national living wage in April this year.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

The ASHE survey also provides statistics on the gender pay gap. The ONS reports that the gap between the earnings of men and women has fallen to 9.4% (from a revised 9.6% in the year to April 2015). By sector, the survey records a gender pay gap of 11.3% in the public sector compared with 16.6% in the private sector.

XpertHR’s research was carried out in August and September 2016 among employees from 249 private-sector organisations, employing a total of more than 678,000 people.

Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

previous post
Sexual harassment award: £14,000 for injury to feelings not excessive
next post
Apprenticeship levy: funding policy from May 2017 finalised

You may also like

Pay awards in real terms could fall for...

21 May 2025

Ryanair demands flight attendants pay back salary increase

21 May 2025

Gen Z are in ‘work situationships’ with employers

19 May 2025

Public sector needs 92,000 more workers to remain...

19 May 2025

Minister defends Employment Rights Bill at Acas conference

16 May 2025

Next to improve wage-setting transparency after shareholder pressure

16 May 2025

CBI chair Soames accuses ministers of not listening...

16 May 2025

NHS Scotland staff accept two-year 8.2% pay deal

16 May 2025

Thousands of civil service roles to leave London

14 May 2025

Healthcare workers prioritise mental health support in new...

12 May 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+