Almost half (49%) of employers considering a pay review over the course of the year are anticipating an increase to basic pay according to the CIPD ‘Labour Market Outlook’ for the first quarter of 2019.
Based on responses from 1,254 employers, the report shows that after more than six years at 2%, the median expected basic pay increase in the private sector has risen to 2.5%, which is the highest registered since tracking began in 2012. With the Bank of England forecasting inflation to fall below 2% for much of 2019, this will mean a real-terms pay rise for many this year.
Other figures thrown up by the quarterly report show that the private sector is becoming more willing to spend money to tackle recruitment and retention problems. Of those private sector employers with recruitment difficulties, 66% have increased starting salaries, up from 56% in the previous quarter. The same figure for the public sector is 27%, which is down from 29% in the previous quarter and 43% in summer 2018.
Among employers who currently have vacancies in their organisation, 71% report that at least some of these vacancies are proving hard to fill, a proportion that is now higher than it was in the same quarter of 2017. Private sector SMEs are more likely to require skilled employees to fill certain roles, with 65% stating hard-to-fill roles are skills-based compared with 57% of larger private employer
However, 20% of organisations are looking to make redundancies over the next three months - the outlook for redundancies has risen from 18% to 24% in the public sector and from 11% to 16% in the voluntary sector.
The full report is available from the CIPD - a not-for-profit organisation with 150,000 members worldwide and which champions better working lives.