Private sector staff to receive higher bonuses

The private sector employees will receive higher bonus payments this year, according to research by Incomes Data Services (IDS).

The IDS Managers Benchmark Pay Report showed more than three times as many private sector firms are expecting to pay higher bonuses in 2011 compared to those who believe they will pay lower bonuses than 2010.

It has also forecast that the private sector will increase salary levels across managerial and professional jobs by 2.5% in 2011, which is below the current rate of inflation. Pay for their counterparts across the public and not-for-profit sector is expected to grow at less than half the pace of the private sector at 1%.

Meanwhile, non-board directors of UK companies received average (median) basic salaries of £110,000 last year. Across the private sector, the average basic salary of a non-board director was £132,000 in 2010, compared to the public sector where the median salary reached £93,555.

Chris Smith, author of the report, said: “Projecting future bonus payments is difficult as they are highly dependent on future business outcomes, but the sentiment across much of the private sector is that performance, as well as incentives, are on the up.

“For managers and professionals the coming year may become a tale of two sectors – the public and private. The pay and employment experience of those working in the public sector could diverge sharply from their private sector counterparts when the new coalition Government’s spending cuts start to bite.

“Median private sector salary increases have not yet reached the growth of 3% they were at prior to the economic crisis breaking in 2007, but they have recovered from the levels we recorded during the depth of the recession.”

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