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Private sector employers predict pay increase

Private sector employers are predicting a median 2.5% pay increase in the year ending August 31 2012.

According to a report from pay specialists XpertHR, pay rises in 2012 are forecast to be above the median 2.3% private sector pay increase seen during 2011.

The survey was based on the reports of 286 private sector companies and their pay intentions for 800,000 employees.

It found that while RPI inflation is expected to average 3.6% over the course of 2012, just 16.4% of pay rises are expected to be at, or above this level.

Manufacturing employers were predicting higher pay rises than companies operating in the services sector, with the highest pay rises likely to occur in the chemicals, engineering and utilities sectors, and the lowest rises are predicted in the not-for-profit, retail and construction sectors.

The research showed that 79.4% of employers refer to the retail prices index when setting pay, and more than half also use the consumer prices index.

XpertHR Pay and Benefits editor Sheila Attwood, said: “Pay award levels have been subdued for several years now, and although a median pay increase of 2.5% in 2012 is above the levels we are currently seeing, it is still well below pre-recession levels, and inflation.

“October is the most common month for setting the pay review budget - employees can only hope that their employer is looking at the latest inflation figures, rather than the forecast falls in early 2012.”

By far the most common influence on pay settlements over the next year was predicted to be “company performance/ability to pay.”

This was posted in Bdaily's Members' News section by Tom Keighley .