Employers’ optimism ‘up’ on pay excluding employee benefits

Pay excluding staff rewards like bonuses is seen rising this year by a higher proportion of employers for almost three years, it has been found.

A recent survey by the Chartered Institute of Personnel and Development, which polled more than 1,000 employers and found the basis mean wage settlement for the 12 months to December 2012 was predicted to be 1.7 per cent.

This is compared with 1.5 per cent in the previous quarter and 1.3 per cent at the same time last year, with pay intentions now rising to their highest level since spring 2009.

However, rewards adviser at the body Charles Cotton warned employers are still feeling worried about the UK’s fiscal health.

Indeed, the research showed 56 and 55 per cent of respondents in the voluntary and private sectors said they were unsure of whether they would be able to provide salary rises as part of the employee benefits they offer their staff.

“As we move further into the pay round and as organisations get a better idea of how well they and the economy are likely to perform, we should see fewer feeling unable to predict the outcome of their annual pay decisions,” Mr Cotton stated.

The public sector saw a large jump in the proportion of firms that intend to raise the wages of their staff members to 30 per cent from 12 per cent in the previous quarter.

Meanwhile, 35 per cent of private sector employers said they would be increasing salaries in the next 12 months unchanged compared with three months earlier.

The Institute for Fiscal Studies recently published research showing public sector pay may not return to its level relative to wages in private businesses for another four years, half of which would be see pay frozen for state-employed individuals, while they would receive rises of one per cent for the remaining two years.

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