Managers’ pay rises below inflation

Private sector pay awards for managers and professionals are forecast to be an average of 2.6% in 2013, while managerial and professional staff in the public sector will see average pay increases of just 0.7%, according to research by Incomes Data Services (IDS).

Its Managers’ benchmark pay report, which surveyed 179 private and public sector organisations, covers all aspects of management reward, including pay rises, salaries, bonuses and pensions.

The research found that pay rises for managers and professionals in the private sector declined in 2012. The average salary increase over the three months to January 2012 was 2.5%, but by the three months to October 2012, the average rise stood at 1.9%.

It also found that 2012 saw an increase in the number of pay freezes, with 16% of all managerial and professional salary reviews recorded as a pay freeze. This compared to 13% in 2011.

The research also found:

  • One in three private sector respondents said they believe that bonuses will be lower in 2013 than in 2012. Fewer than one in six said they believe that bonuses will be higher. The remainder, just fewer than 50%, said they believe bonuses will remain the same. 
  • In the private sector, median salaries for the highest level of management covered were well above £100,000. Salaries for non-board directors in the private sector were £115,756.
  • Lower down the scale, function heads could expect to earn £89,500, senior managers £67,300, middle managers £49,000 and junior managers £36,895.

Adam Cohen, researcher at IDS and author of the report, said: “Our latest figures suggest that 2013 will be the third year running that managers and professionals will not have seen above-inflation pay rises.

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“Pay awards declined sharply in 2012, and the signs from HR departments are that many managers and professionals will again see their pay struggle to keep pace with inflation in the coming year.

“Public sector managers in particular are only likely to enjoy inflation-busting pay rises if they secure a promotion or move jobs.”