UK employers’ anticipated wage growth for the next twelve months fell last quarter from 4% to 3%, according to the latest Labour Market Outlook report from the Chartered Institute of Personnel and Developmen (CIPD).
They had held at 5% throughout 2023 before falling to 4% at the turn of this year. With pay intentions cooling and cost-of-living challenges persisting, the CIPD is calling on employers to look at other ways they can support employees, such as improving job quality and incorporating financial wellness into their wellbeing strategies.
The quarterly CIPD report surveys 2,000 UK employers about their pay, hiring and redundancy intentions.
This latest survey found that pay expectations have slowed to their lowest rate since the summer of 2022. Median basic pay increase expectations fell from 4% to 3% in the private and voluntary sectors and from 3% to 2.5% among public sector employers.
James Cockett, senior labour market economist for the CIPD, the professional body for HR and people development, said:
“Falls in expected pay rises were anticipated now inflation is within a tolerable range for employees. However, many workers will still feel worse off than they did a couple of years ago, so other benefits like providing flexible working, offering benefits that help boost take home pay, and taking steps to improve job quality, are in employers’ interest to help both support and retain staff.”
