Employees in the UK will experience a year of above-inflation pay rises in 2013, according to research by Mercer.
Its Salary movement snapshot, which tracked the pay plans of 570 multi-national organisations operating in 76 countries in Europe, the Middle East and Africa, found that UK employers are anticipating base pay rises of 3% for their staff.
Mark Quinn, partner and pay specialist at Mercer, said: “The picture is certainly brighter for the average UK household, but the pressure is being relieved more by lower inflation rather than higher pay increases from organisations.
“Employers are still keeping a tight rein on salary increases. The economic situation is still precarious and organisations remain cautious with their fixed costs, such as salaries, which make up a very significant part of the cost base of their organisations.
“What we are seeing is that many organisations are implementing low-cost, high-value programmes, such as employee recognition schemes in an attempt to further reward their staff.”
Across Western Europe, on average, employers are predicting employee pay rises of 2.6% in 2013, which is marginally lower than the average of 2.7% awarded in 2012. Employees in Austria, Germany, Norway and Sweden are all expected to receive pay rises of 3%, with those in Italy and Finland expected to receive 2.9%.
Employers in Denmark and France are anticipating employee pay rises of 2.6%, with those in Portugal and Spain expecting 2.4%. Employers in Greece are expecting to award pay rises of 2.3%, in Ireland 2.1%, and in Belgium and Switzerland only 2%.Employers in Luxembourg anticipate awarding 1.8% pay increases in 2013. This excludes those organisations that are predicting a pay freeze in 2013.
Employers in Eastern Europe are anticipating average pay rises of 4.6%. Russian organisations are predicting pay rises of 9% across all employee groups. Cyprus, Latvia and Lithuania are at the other end of the regional spectrum, predicting pay rises of 3%.
Romania and Turkey are predicting 5.1% and 8% pay rises respectively, followed by Bulgaria (4.8%), Poland, Hungary and Bosnia and Herzegovina, with employers in these three last countries anticipating increases of 4%. Employers are planning base pay increases for their employees in Croatia, Estonia and the Czech Republic of 3.5%, 3.5% and 3.1% respectively.
Employers in Africa are anticipating average increases of 8%.Employers in Morocco (4.9%), Tunisia (5.3%) and Algeria (6.8%) are predicting high pay increases for employees, while employers in Egypt and South Africa expect to award 10% and 7%, respectively.
Employers in the Middle East are anticipating average increases of 5.2% .Employers in the United Arab Emirates (UAE) and Saudi Arabia are expected to approve pay increases of 5% and 6%, respectively.
Ilya Bonic, senior partner in Mercer’s Geneva office, said: “Organisations are placing less emphasis on inflation rates when budgeting for pay increases, and factoring such variables as relative pay competitiveness, affordability, labour market conditions and confidence into their business outlook.”
The figures in the research are the median figures, which compensation and HR managers are forecasting in each country. The forecasts have to be approved by company management and depend on numerous economic factors, as well as an individual employee’s performance.