Low salary increases regarded as ‘stable’ during economic uncertainty

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Median pay deals remained at 2.5 per cent in recent months, with employers predicting similar rises next year, according to new research.

A study of almost 50 settlements covering 580,000 workers by Incomes Data Services (IDS) showed a picture of stability despite uncertainty over the economy.

A third of the awards in the quarter to September were worth at least 3 per cent, fewer than in the three months to August.

Ken Mulkearn of IDS said: “Upward pressures on pay are muted, thanks to falling inflation, continued fragility in the labour market – with an increase in part-time at the expense of full-time
work – and a comparatively low uplift in the national minimum wage.

“But many employers have had at least one eye on staff engagement and motivation, and as a result pay freezes are rare.
However there’s still a gap between inflation and many
pay awards, leading to a continued squeeze on household incomes for large numbers of employees.”

A separate report by XpertHR said employers in private firms were predicting pay awards
will be 2.5 per cent over the next year.

A survey of almost 250 employers showed that those in manufacturing and production were forecasting a higher increase.

Spokeswoman Sheila Attwood said: “The predicted 2.5 per cent pay increase in the year ahead demonstrates continued caution on behalf of employers, who will again primarily assess company performance and their ability to pay when setting their pay award budget.”