Firms 'cautious' over future pay rises
A small rise in average pay of only around one per cent is likely to lead to leading to a fall in living standards for a 'significant' number of workers, a study shows.
A survey of 1,000 employers suggested the economy is about to be hit by a fall in basic pay awards and real wages over the next year.
Research by the Chartered Institute of Personnel and Development found that employers’ median basic pay expectations over the next year have fallen to just one per cent, compared with forecasts three months ago of 1.5 per cent.
Demand for workers remains “robust”, especially among manufacturers, said the report.
Gerwyn Davies of the CIPD, the professional body for human resources managers, said: “The good news in this latest survey is that employment confidence remains positive, with sectors such as manufacturing and production proving particularly buoyant.
“The bad news is that there is a real risk that a significant proportion of UK workers will see a fall in their living standards as the year progresses, due to a slowdown in basic pay and expectations of inflation increases over the next few months.
Babs Murphy, chief executive of the North & Western Lancashire Chamber of Commerce said: “As recruitment and retention issues arise employers are very likely to have to increase salary levels to secure the skills they need but unfortunately many businesses simply don’t have the capacity to award higher pay awards.
"With RPI inflation rising, most employees are having to face the prospect of a below-pay awards and despite upwards pressures in a number of areas, firms are remaining cautious about awarding pay rises.”
Meanwhile, in another indication of economic and Brexit uncertainty, vacancies for private practice lawyers across the North West have fallen by 18 per cent year-on-year according to new survey data from specialist recruiter, Clayton Legal.
The firm believes the fall in advertised positions can largely be attributed to lawyers being reticent to move roles in an environment of uncertainty.