01 Nov 2019

New research has revealed that wage growth is expected to slow in the coming year.


According to data from XpertHR, pay awards have generally been worth 2.5% over the past year. But the outlook for 2020 is not looking quite so peachy, with XpertHR’s predictions placing growth within private sector companies at 2.1% over the next 12 months.


According to the data, 77% of employees can expect to receive a pay rise in the coming year. For 74% of employees, this could be at the same level as over the past year, but no higher.


The estimated 2.1% pay award over the coming year is 0.4 percentage points below the level currently being paid.


Looking at the research, here’s what we can expect over the coming months.


    Median pay award: There will be some stability, but the median pay award could fall, with half of employers predicting their pay award will drop between 2-3%.
    Benchmark remains at 2%: The majority of employers will continue to use 2% as a benchmark pay award. After 2%, the most commonly cited figures from the research were 3% and 2.5%.

    Private sector services: In private sector services, employers expect a median pay award for just 2% over the next 12 months, compared to 2.5% to the year ending August 2019.


The ability to attract and retain staff and pay a competitive salary are expected to put pressure on pay awards over the coming year. However, money is not the only factor. The ongoing uncertainty surrounding Brexit and a company’s performance can also drag settlement levels down.


Speaking about the findings, XpertHR’s pay and benefits editor Sheila Attwood said: “Employers’ annual pay reviews are expected to deliver a pay rise to employees over the coming year, but the level of increase could well be lower than we have seen over the past 12 months.”


She continued: “While the strong labour market continues to put pressure on employers to raise wages, other costs and an uncertain outlook could well mean lower pay rises for employees.”


So, with salaries set to slow in 2020, what can companies offer potential recruits instead of wage growth? Many people – millennials in particular – place great importance on personal development opportunities and flexible working options when looking for a new job. This generation also want to know how they fit into a company and how they can contribute to the community in which they work.


At Stopgap, we’ve been placing people in marketing roles for more than 25 years. Over that time, we’ve seen changes in salaries and people’s expectations alike. If you’re looking for a new challenge or are keen to fill a role, we can help.


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