British employees get cautioned regarding decreased salary growth
Date
2/21/2024 6:17:47 AM
(MENAFN) A recent report from the Chartered Institute of Personnel and Development (CIPD) has raised concerns for workers in the United Kingdom, suggesting that they may experience lower wage increases this year. The report highlights a trend among employers who are considering cutting pay rises due to ongoing economic challenges, leading to a potential impact on workers' purchasing power.
According to the CIPD report, many United Kingdom employers are reevaluating hiring plans as they navigate a period of slowing economic growth. The average expected pay rise in the United Kingdom dropped to 4 percent in the final quarter of 2023, marking the first decline since the onset of the Covid-19 pandemic. The private sector's median expected increase mirrored this decline, dropping from 5 percent to 4 percent, while the public sector experienced a steeper decrease from 5 percent to 3 percent.
CIPD's senior labor market economist, Jon Boys, noted that the widening gap in pay expectations between the public and private sectors is a significant development in the United Kingdom labor market. He emphasized the challenges faced by the public sector amid mounting pressures, which could potentially impact public services.
The potential slowdown in wage growth could have far-reaching consequences, impacting Britons' purchasing power and limiting disposable income at a time when living costs are on the rise. Experts warn that this could prompt individuals to reassess their budgets and expenses, affecting overall consumer spending.
Jon Boys explained the dynamics at play, stating, "We've seen a sustained period of high wage growth in response to a tight labor market, and high inflation pushing up the cost-of-living. Pay growth has helped individuals but it leaves employers with a higher wage bill to cover."
The survey, conducted last month with over 2,000 employers, revealed that about a third of employers plan to increase their headcount over the next three months, while 10 percent anticipate reductions. As the United Kingdom workforce navigates this potential shift in wage dynamics, the economic landscape continues to pose challenges for both employers and employees alike.
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