UK employers plan 5% pay rises, many resort to counteroffers: CIPD, ETHRWorld

By David Milliken

LONDON – British employers expect to raise pay by 5% over the coming year and are increasingly making counteroffers to keep staff who are tempted by higher wages from rival firms, according to a survey which added to signs of inflationary heat in the job market.

The Chartered Institute of Personnel and Development (CIPD) said human resources executives expected to increase basic pay rates by a median 5% – unchanged from the previous two quarters and the joint-highest readings since the survey started in 2012.

Pay expectations in the public sector rose to 4%, the highest recorded by the CIPD, from 3.3%.

The survey of 2,000 employers took place between June 9 and July 5, before Prime Minister Rishi Sunak offered a pay rise of more than 6% to teachers, doctors and other public-sector workers.

Private-sector wage growth expectations of 5% found by the CIPD were in line with those in a recent Bank of England survey of businesses.

The BoE said on Aug. 3 that pay growth had failed to slow, creating a risk of persistent high inflation and higher interest rates.

Growth in earnings excluding bonuses – which typically runs slightly higher than pay settlements – was an annual 7.3% in the three months to May. Data on Tuesday is forecast to show a further increase.

The CIPD said businesses were also becoming more likely to match…