New research has found that UK employers are planning to give their staff an average annual pay rise of 2.9% in 2022.
A total of 725 UK firms took part in a study about salary budgets and recruitment by Willis Towers Watson (WTW), which revealed that 2022’s pay increase is set to be more than the 2.4% average this year. As inflation is forecast at between 2-4% for next year, this is a significant increase in previous years.
According to the research, this finding comes as the proportion of businesses that are expecting to completely freeze staff pay looks likely to fall from more than 10% this year to just 1.7% in 2022.
Average rises in 2022 are anticipated to be higher in the media, leisure and hospitality, and high tech sectors, at 3.3%, 3.2% and 3.1% respectively. Those working in the banking automotive and chemicals sectors will have smaller increases, at 2.3%, 2.4% and 2.5% respectively.
The findings also highlighted that this year, UK businesses have fought to motivate and retain staff by awarding their top-performing employees a pay rise that was 2.6 times greater than that given to those with average performance ratings.
In addition, more than half (54%) of UK organisations said their business outlook is ahead or well ahead of where they thought it would be at this time, while 3% stated it was below expectations.
So make sure you are paying the right salaries for your roles and awarding market rate pay increases if you can afford to so, to make sure you are able to retain your team. But if you want any further advice on salary benchmarking, please don’t hesitate to get in touch.