Workers in the UK should be prepared for the smallest pay rises since the Covid pandemic, according to a leading human resources body.
The Chartered Institute of Personnel and Development (CIPD) has warned this will be reality for many employees due to bosses easing on hiring in latest outlook report.
According to the group, the average pay rise will fall from five per cent to four per cent despite the cost of living crisis continuing to diminish peoples’ savings.
The HR organisation noted that wages for workers in the UK have held steady at five per cent for more than a year.
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Workers are being told to prepare for the smallest pay rises since the pandemic
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However, employers are expecting basis pay increases for 2024 to drop to four per cent which will be first fall in expectations since the pandemic.
Median expected basic pay increases in the private sector have fallen from five per cent to four per cent since the last quarter.
Over the same period, pay expectations in the public sector have plummeted even further from five per cent to thee per cent.
Based on the CIPD’s report, fewer bosses expect their workforce to grow than in previous quarters with a third of employers planning to increase their total staff level over the next three months.
Some 10 per cent plan to decrease their overall staffing levels, while 38 per cent revealed difficulties in filling vacancies.
One in five respondents expect to have significant problems in filling job roles over the next six months.
Jon Boys, senior labour market economist for the CIPD, the professional body for HR and people development, said: “We’ve seen a sustained period of high wage growth in response to a tight labour market, and high inflation pushing up the cost-of-living. Pay growth has helped individuals but it leaves employers with a higher wage bill to cover.
“To see a sustained return to growth, there needs to be a real focus on boosting productivity by investing in workplace skills and technology.
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Employees are trying to make meagre pay go further during the cost of living crisis
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“It’s also in employers’ interest to communicate with employees their wider benefits package and improve job quality to compensate if they are planning to reduce base pay increases.”
Mr Boys noted that the cost of living crisis was still an ongoing issue for workers which means employers will need to find other ways to assist if pay rises are out of the question.
These may include flexible working hours, working from home or offering to cover the cost of childcare.