Private sector employers have stated that they will be awarding staff a 2% pay rise in the next 12 months.
Findings from a recent survey carried out by pay analysts XpertHR have shown that employers are being cautious in the 2% award, and that many employees working in the private sector will fail to see a real term increase in their salary due to inflation rises.
The findings come from the 2016 Annual Survey of Hours and Earnings reveals that median gross weekly pay in the private sector rose by 3.4% over the year to April 2016 – up from the 1.6% increase recorded the year before. In the public sector, pay rose by 0.8% over the same period.
Due to the UK Government’s policy on capping pay increases, employees engaged in work for the public sector will fare worse than their private sector counterparts and will only receive a 1% increase in pay in 2017.
Industries that are predicting a greater pay increase for employees next year include construction (3%), whilst the not-for-profit sector are hoping to reach the 1.5% pay increase mark in 2017.
Unfortunately, predictions have been made that inflation will overtake the 2% pay award increase for the private sector meaning that most employees will discover that their cost of living will rise over and above their take home pay, meaning more pressure on employees to tighten their belts or seek better financial remuneration elsewhere.
The full extent of inflation versus pay increases is yet to be known, however many industry experts are hinting that the 2% private sector pay increase will fall significantly short of inflation and that many employees will hardly notice the small increase as their annual cost of living will rise with the cost of goods and services creeping up.