Global salaries are predicted to rise by an average of 1.9 per cent above inflation next year, according to a study by Mercer Human Resource Consulting.
In almost two-thirds of the countries surveyed, including the UK and US, pay is forecast to rise between 1 and 3 per cent above the rate of inflation.
However, some countries are bucking this trend. In Lithuania, India and Bulgaria salaries are expected to outpace inflation by 7.7 per cent, 7.2 per cent and 5.6 per cent respectively.
Mark Sullivan, European partner at Mercer, said that as economies were becoming stronger and unemployment rates were falling, it was surprising that companies were resisting wage inflation.
“Next year’s pay increases are likely to be the same or lower than this year’s,” he said. “The question is, how long can corporations keep the lid on pay rises when the job market is becoming increasingly buoyant?”
The report reveals clear differences in pay and inflation trends across various regions of the world.
In Western European countries, average pay increases are predicted to be highest in Greece, at 5.2 per cent. Meanwhile, inflation is likely to be 2.4 per cent. Employees in Italy, Spain and Portugal are also expected to receive large pay rises. Pay is predicted to increase by 3.4 per cent in the UK and inflation is likely to be 1.8 per cent.
While salary increases in the US and Canada are likely to remain in line with recent years, at 3.5 per cent and 3.3 per cent respectively, inflation is likely to rise to 3.1 per cent in both countries.
Predicted pay increases in some Central and South American countries are among the highest in the world. However, these rises are likely to be offset by high inflation rates. In the Dominican Republic employees are forecast to receive pay rises of 22.5 per cent, while inflation is likely to be 35 per cent.
Salary increases in many Asian/Pacific countries are expected to be high next year, outpacing inflation rates. Employees in India and Indonesia are likely to receive pay increases of 11.4 per cent and 11.3 per cent respectively, against inflation of 4.2 per cent and 7 per cent. In Australia, employees can expect to see their pay rise by 4.3 per cent, while those in New Zealand are likely to see slightly lower increases of 3 per cent.