Fewer employees expect a pay rise in 2011

A smaller proportion of employees expect a pay rise next year, according to research conducted by the Chartered Institute of Personnel and Development (CIPD)

Out of the 3,000 respondents that took part in the 2010 employee attitudes to pay survey 58% expect a pay rise next year, a significant worsening in outlook from last year when 67% envisaged an increase.†

The likelihood that employees will receive a pay freeze has also increased significantly with a third (33%) predicting no change to their salary compared to a quarter (25%) last year. Like last year, 2% of workers expect a pay cut.

Public sector employees, however, are more pessimistic about their future with half (49%) predicting a pay freeze in 2011 and 44% forecasting a pay rise, (compared to just 29% and 61% respectively in the private sector).

In addition, only 9% of public sector workers believe that next year’s pay rise will be higher than 2010, while a far greater proportion (29%) of private sector workers are predicting the same. For those expecting a pay rise in 2011, those in the private sector forecast a median increase worth 3% and those in the public sector believe that they will receive a 2% rise.

Charles Cotton, performance and reward adviser at the CIPD, said: “While the proportion of employees who have seen their pay frozen has increased in 2010, we predict that this will fall next year as more private sector employees enjoy a pay rise and fewer of them receive a pay freeze on the back of the improving economy. Even in the public sector, many employees will still see their pay rise next year if they earn less than £21,000 or they are due an increase related to their length of service or their performance. It may be that workers are being very cautious in their pay outlook for 2011 after being disappointed by what happened to them in 2010.”

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