Firms are still unsure about their pay strategy according to data from CIPD


Figures from the CIPD’s latest ‘Labour Market Outlook’ reveal more than half (53%) of private sector organisations still don’t know if they’re going to increase, decrease or freeze wages. This is greater than in the public sector (45%) and the voluntary sector (39%).

The same data shows only 42% of private sector firms say they will definitely boost pay this summer – which is also drop of two percentage points compared to the previous quarter.

In the public sector, the proportion of employers who say they’ll offer a pay rise has also dropped to 41% - and by a much larger amount (from 49% in spring 2015).

Better news comes from those who’ll say they’ll enforce a pay freeze. Only 5% of private sector employers say they’ll have a freeze (down from 6%), and even the public sector shows signs of improvement. Here, only 13% say they’ll be having pay freezes – a fall from 18% who said this in the spring.

Gerwyn Davies, the CIPD’s labour market analyst said: “At one end of the spectrum, workers in occupations where there are skills or labour shortages, and thriving sectors such as finance and construction seem likely to get pay increases well above current inflation.”

He added: “At the other end of the scale, many workers in areas such as manufacturing and the public sector, are seeing only a very modest increase in living standards. In-between, the bulk of workers will continue to see moderate growth in their pay packets.”

The data, based on the responses of 931 HR professionals, revealed pay restraint in the public sector was the main reason they couldn’t give rises of more than 2%.

In addition to this, one third of employers cited affordability as a reason they couldn’t give more generous rises.