Employers in the private sector are planning to award a median 2% pay rise to staff over the next year, according to a survey from analysts, XpertHR. As inflation is predicted to hit 2.5%, this means that many employees within these organisations will not see a real increase in basic pay in 2017.
A 2% pay award has dominated XpertHR’s settlement data for several years and 2017 looks to be no different: around a third of the organisations in its annual survey expect to make a 2% award. Only the construction sector predicts higher awards of around 3% next year.
Meanwhile, the analyst’s headline measure of settlements – the median pay award across all sectors – based on 82 pay awards effective in the three months to the end of September 2016 stood at 1.7%, down on the 2% figure seen recently. But XpertHR suggests this can largely be explained by the fact that the latest quarter includes a disproportionate number of public sector deals, which are running at a lower level than the private sector.
Sheila Atwood, pay and benefits editor at XpertHR, said:
‘Employers expect to give their employees a 2% pay rise over the next year. As inflation is now at this level, and expected to rise, for employees this seems to signal the end of the almost two-year run of real terms increases in pay.’