DESPITE the prime minister’s plea for UK businesses to reward staff with higher pay rises, most companies predict wage rises of just 2% this year.
David Cameron made the plea last month but new research shows private-sector employers are happy to snub him, according to the latest data from pay analyst XpertHR.
The state of pay this year
- Middle half of pay awards effective in the three months to 28 February 2015 are worth between 1.6% and 2.5%;
- Most common pay award was a 2% increase, awarded in 26.3% of cases;
- Manufacturing-and-production companies’ pay awards are worth a median 2.1% in the latest analysis;
- Pay freezes account for around 10% of all pay awards;
- Pay awards in the public sector were worth a median 1.5% in the 12 months to the end of February 2015.
Although almost eight organisations in 10 are planning a general pay increase for staff over the next year, the level of the increases expected does mute some of the optimism, says the analyst.
However, while the across-the-board pay rises are likely to remain low, this is not to say that employees won’t see other increases in their pay.
It is clear that employers still do not have the ability to pay higher increases to everyone; instead, the recruitment and retention issues that many organisations are experiencing are being addressed with one-off increases to pay being made in particular hot spots.
The survey of private-sector employers also found that around two-thirds of organisations are still likely to take some steps to control their paybill costs over the coming year.
Measures likely to be employed include: not replacing leavers; reducing overtime or overtime payments; lower pay rises; and redundancies.
XpertHR’s bi-annual survey of pay forecasts is based on responses from 266 private-sector organisations.
Private employers can also point to Cameron’s public sector pay policy that restricts 2015/16 pay awards to up to an average of 1%.
