Jobs: It looks like pay may be on the way up

A survey of more than 1,000 employers, commissioned by the Chartered Institute of Personnel and Development (CIPD), found the average expected pay settlement was 1.7 per cent, the highest since spring 2009.

Private sector pay rises (forecast by 35 per cent of employers) are creeping up from 2.1 per cent to 2.2 per cent, with manufacturing and production firms and the service sector giving the biggest remuneration boosters. Average pay in the public sector will be rising by 0.8 per cent, says the CIPD survey.

On average, 16 per cent of all employers predict a pay freeze for the coming year, but this ranges from 9 per cent in the private sector to 40 per cent in the public sector.

In the private and voluntary sectors, 55 per cent and 56 per cent respectively feel unable to predict the outcome of their pay decision.

Charles Cotton, CIPD rewards adviser, said: “While the predicted increases in pay settlements reflects a cautious optimism among members in the private sector that the worst may now be over, uncertainty about how fast the economy will improve is acting to moderate pay forecasts and leading many employers to hedge their bets on the outcome of the final decision.

“As we move further into the pay round and as organisations get a better idea of how well they and the economy are likely to perform, we should see fewer feeling unable to predict the outcome of their annual pay decisions.

“Across all sectors, and whatever pay decisions are predicted, it’s vital that employers maintain an honest line of communication with employees in order to keep staff motivated and engaged; previous CIPD research has shown that employees are satisfied with their employer’s pay decision if their employer has taken the time to explain the rationale behind that decision.

“The same research also showed that even among those employers that do talk to employees about the basis of their pay rise, few took the opportunity to explain to staff what needed to happen in the next 12 months for staff to get another increase.”