Private sector employers are preparing to offer only low or modest pay rises over the next year, according to the latest XpertHR pay forecast survey.
According to the survey's findings, the median pay rise predicted for the 12 months to the end of February 2012 is 2%.
However, employers who negotiate their pay deal with unions are expecting to award higher than average pay rises, at a median of 2.5%, compared with 2% at companies who do not do so.
According to private sector employers, key influences on pay in the coming year are their ability to pay for wage increases (77%), inflation (51%) and pay levels across the same industry (44%). One in seven (15%) employers cited public sector spending cuts as one of the top three influences on pay awards.
Although the majority (64%) of the 225 organisations surveyed are set to implement pay rises, one in 10 (11%) predict that wages will remain frozen and a further 9% think that a delay in pay rises is likely in their company.
Sarah Welfare, XpertHR pay and benefits deputy editor, said that the findings show that public sector employers aren't the only ones facing an uncertain year ahead.
"There is no sense that the majority of employers are rewarding staff with generous pay rises to compensate for the rising cost of living, though some tell us they would like to," she said.
"Instead, many employers are looking to improve their benefits offering in an attempt to compensate for low pay rises."