Amid economic uncertainty, UK employees should prepare for slower pay rises this year, per CIPD.
- Despite increased business confidence, planned wage hikes are the lowest since the pandemic.
- Private sector wage growth differs sharply from the declining public sector rates.
- Investment in non-monetary benefits is essential for attracting and retaining talent.
- Digital poverty could worsen if current economic and digital inequalities persist.
Amid economic uncertainty, UK employees should prepare for slower pay rises this year, according to the Chartered Institute of Personnel and Development (CIPD). The anticipated average pay increase is expected to decline from 5 percent to 4 percent. This anticipated slowdown marks a shift from the steady 5 percent increment maintained over the past year.
Despite increased business confidence, planned wage hikes are the lowest since the pandemic. A stark contrast is evident between the private and public sectors. While the private sector’s pay rises reflect the predicted 4 percent increase, the public sector anticipates a drop to 3 percent.
Derek Mackenzie, CEO of Investigo, highlights the importance of non-monetary benefits in employment. “When it comes to employment, pay is naturally going to play a central role for every member of staff,” Mackenzie states, emphasizing the necessity for career progression, flexible policies, and training programs to differentiate organizations and improve employee satisfaction.
The implications extend further, with digital poverty exacerbating challenges during these economically turbulent times. Elizabeth Anderson, CEO of the Digital Poverty Alliance, highlights the vulnerability of around 19 million people in the UK lacking access to fundamental digital resources. Anderson stresses the importance of employers ensuring access not only in professional settings but also in the employees’ home lives.
The labor market is showing signs of strain, as employers have reduced the number of planned hires compared to previous quarters. As competition for staff diminishes, one-third of employers plan to increase headcount in the upcoming months, while 10 percent foresee a reduction. This trend aligns with CIPD expectations, which suggest easing labor market pressures.
In conclusion, while economic uncertainties loom, strategic emphasis on non-monetary benefits and digital inclusivity can help mitigate the challenges posed by slower pay growth.
