Half of employers predict pay rises of between 2% and 3% for 2019


Just under half (48%) of respondents predict they will deliver pay rises of between 2% and 3% for 2019, while 32% anticipate they will have a pay review budget of between 1% and 2%, according to research by management consultancy Paydata.

Its UK reward management survey, spring 2019 report, which polled 154 professionals, including HR staff, finance directors and reward and compensations specialists, also found that 50% of respondents believe that the number of employees receiving an annual bonus will remain the same, while 41% predict that the size of bonus payments will also stay at the same level for 2019. In addition, 16% estimate that annual bonus amounts will increase and 13% expect a decrease in the size of bonuses.

Less than a third (31%) of employer respondents offer long-term incentive plans at spring 2019, compared to 43% of organisations that operated these in spring 2018.

Tim Kellett (pictured), director at Paydata, said: “Loyalty no longer equates to larger pay packets. Two-thirds of organisations have had to offer new recruits salaries that conflict with those paid to existing employees.

Pay increases are similarly varied. However, more respondents indicated that there would be no pay reviews this year within their organisations, suggesting pay freezes continue to operate and are potentially on the rise.”

Employers are also exploring their gender pay gaps, with 46% conducting further analysis in to gender pay and 5% implementing an equal pay audit. Around a third (31%) of respondents say they are not taking any action at all.

More than half (58%) are taking pay gap data a step further by looking at figures around ethnicity for their employee population, or are planning to do this. Around 44% are exploring their demographic in terms of disabled employees, while 42% are studying employees’ age.

Just under two-thirds (62%) expect retention issues to continue for the next 12 months, compared to 40% who said the same in spring 2018.

For 2019, 78% of respondents think that pay benchmarking is the key agenda item for HR departments, while 76% cite employee opinion surveys as an important activity. A further 69% plan to analyse their pay review process, while 41% are considering conducting an equal pay study.

“Incremental progress is being made in closing the gender pay gap, which stands at a median of 16.3% [among] respondents,” added Kellett.

“Perhaps this is, in part, due to the breadth of the initiatives already in place that are designed to effect wider diversity in the workplace. We explored the initiatives organisations have in place to promote and champion a diverse workforce. We welcomed reports of varied and inclusive practices that 86% of employers offer, which all aim to effect long-term change.

“Despite definitive detail around what Brexit will mean for business and trading conditions, business optimism holds steady in spite of this political turbulence, with caution remaining a key approach for the majority of businesses.”