Private-sector employers predict 2.5% pay increase

Private-sector employees are expected to receive pay increases of 2.5% over the next 12 months, according to survey results published today by XpertHR.

The findings amount to more of the same for employees in the sector, with increases remaining at 2.5% or below since March 2009.

The survey asked 127 private-sector employers, employing a total of 86,164 people, about their pay intentions for the next 12 months. It highlighted a predicted median increase of 2.5% when basic and performance-related pay were taken into account, falling to a 2% median increase for basic pay alone.

Three-quarters (76.4%) of respondents said they plan to offer a pay rise over the next year, with 11% planning a pay freeze over the same period.

For those employers planning to offer a pay increase, inflation was the most commonly cited reason for doing so (by 56% of respondents), with recruitment and retention and affordability cited by 50% and 49% of respondents respectively.

The median 2.5% increase is below the rate of inflation and is set to leave employees struggling, according to XpertHR pay and benefits editor Sheila Attwood: “Employees look set to experience yet another year of anaemic pay rises.

“With 2% to 2.5% likely to be the going rate for the foreseeable future, inflation continues to outpace wage increases, with most employees seeing their pay fall behind in real terms.”

XpertHR has also today published its latest data on monthly pay deals, which points to basic pay awards at a median 2.5% in the three months to the end of February; this is unchanged on the previous three months. All of the awards surveyed by this monthly report are between 2% and 2.8%.

For the full survey data, visit XpertHR.

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