By Jonathan Davies
UK workers look set for real wage growth in 2015, according to global management consultancy, Hay Group.
Despite the economic recovery, it is widely accepted that the public have not felt the benefits with wages growing slower than inflation. But with wages forecast to grow by 2.5% in 2015, lower inflation (which is expected to be around 1.7%) means the British workforce is in for just the second rise in 'real term' wages since 2009.
Looking at the UK by sector, subtle variations in pay emerge. Organisations in engineering-related sectors are forecasting larger increases, as the war for talent intensifies. Organisations in the Chemical, Oil and Gas and Manufacturing sectors are all predicting salary rises above the UK average, at 3%, 3.5% and 3% respectively.
Under pressure retailers are forecasting salary rises at 2%, while finance, FMCG and utilities companies all mirror the UK average of 2.5%. The government’s increase cap of 1% continues to impact the combined Public Sector and Not-For-Profit forecast of 2%.
Adam Burden, Consultant at Hay Group, said: “This year’s UK pay forecast suggests optimism is returning to businesses as employers are anticipating salary increases above inflation. This is an encouraging sign of confidence in the economy.
"Now that many employers have reasonable budgets to play with, they need to ensure these are implemented effectively to help make employees feel valued and drive motivation in the workplace. In organisations that give pay rises based on performance, employees finally have a good increase to aim for.”
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