Pay rises may increase, says IDS

One in three employers plan to implement higher pay rises for their workers next year, a new report suggests.

But with current economic uncertainty, the climate on wages will be “tough”, the survey by pay analysts IDS found.

The group reported that more than 50% of employers were planning to make the same level of pay award next year as they did in 2011. 

About a third said wage increases would go up next year, but 13% said increases would drop. 

Most pay awards have increased in 2011, IDS found, and pay freezes had dropped to low levels not seen since the end of 2008.

This year, median wage increases were running at 2.5%, in comparison to last year’s 2%.The manufacturing industry generally saw the highest pay awards, with private services dropping behind, IDS said. 

IDS’ Ken Mulkearn said there will be conflicting pressures on pay in 2012.

“If the recession recedes, there may be pressure for higher awards, particularly at firms where increases were lower or zero before,” he said

“Continued high inflation adds to this pressure, but the uncertain economic outlook, and the impact of public sector cuts on both the wider economy and the labour market will make for a tougher climate when it comes to decision-making on pay.”

Our Employment team provides advice on the employment aspects of all major business decisions. For advice, contact a member of the team, call us on 08456 381 381 or email enquiries@ibblaw.co.uk.