Real wages for UK workers are set to increase by 2.3% in 2016, according to the latest pay data from Korn Ferry Hay Group. While salary forecasts of 2.5% are the same as for 2015, very low predicted inflation levels mean employees will see a real increase in income of just over 2%, the consultants suggest.
Employees in the consumer goods industry are expected to see the highest pay rises, of around 3%. The positive pay picture for the UK is mirrored across Europe, where workers are set to see average increases of 2.8%, which translates into real rises of 2.3% once forecast inflation is taken into account.
Adam Burden, consultant at the firm, comments:
‘The minimum wage increases planned over the next five years to meet the government’s living wage requirements will place pressure on many organisations. This is especially true for retailers, where wages are such a large proportion of their overall costs. In current trading conditions, these rising costs cannot be simply passed onto customers. If employers wish to keep pace with the changing pay market, they’ll have to find other ways (increasing productivity or reducing headcount) to bring costs down and satisfy consumer demand for low prices.’