Pay awards set to stay at 2% in 2016 – XpertHR

Private sector employers are expecting pay awards over the coming year to be at 2%, according to XpertHR’s latest forecast based on a survey of 313 UK organisations. This continues a pattern established after the financial crash of 2008, since when XpertHR’s headline measure – the median level of settlements – has stood at 2.5% or less in the sector following a period where they fluctuated between 3% and 3.5%.

  • Settlements are expected to be slightly higher in the construction industry, where employers are predicting basic pay will increase by 3%.
  • Pay awards in the utilities and charities sector are predicted to be amongst the lowest next year, with median increases of 1% and 1.8% respectively.
  • Public sector organisations are not included in the analysis as these employees are covered by a central government policy of funding workforces for a pay award of 1% for a four-year period from 2016/17.

Rachel Sharp, XpertHR pay researcher, said:

‘Instead of making higher pay awards across the board, employers are having to target their spend into areas where the labour market is tightest. Employees across the private sector are likely to be bitterly disappointed that their employers still don’t feel in a position to award higher pay rises than we’ve seen over the past few years.’
‘Forecasts for pay awards in 2015/2016’, XpertHR, October 2015. To find out more, please visit: