Real wage increases in the UK to be lower in 2015 according to new Salary Trends survey
“3 per cent wage increases in the UK next year continues the trend we have seen over the past four years,” said Mark Harrison, Manager, Remuneration Services. “With inflation expected to rise slightly next year employees here will see their salaries increase 1.2 per cent in real terms next year, down on this year’s 1.4 per cent. Nevertheless this is still higher than the real wage increases we saw last year which were only 0.5 percent above inflation.”
On average, wages in Europe will rise 3.5 per cent. Companies in Ukraine are forecasting the highest increases in the region followed by Russia and Turkey. However, once inflation is factored in all three locations will have the lowest wage rises in real terms.
The lowest pay rises to be granted in the region are expected in Greece, Ireland, Portugal, Spain and Switzerland. Companies in all five countries anticipate 2 per cent increases in 2015.
The region’s highest & lsquo;real’ wage increases - ie once inflation has been factored in - are expected in Bulgaria followed by Poland and the Netherlands.
ECA's 2014/2015 Salary Trends Survey reports current and projected salary increases for local employees. This year, it is based on information collected from 340 multinational companies across 66 countries and regions. More than 120 companies provided data on their UK-based staff.
According to company predictions from around the globe, wages will rise 5.8 per cent on average in 2015, slightly up on this year’s 5.6 per cent average.
Companies in Argentina are forecasting the survey's highest pay rises in 2015. Employers there are predicting 28 per cent pay rises for staff next year on average. However, once inflation of over 27 per cent has been factored in these large increases will have little impact on spending power.
Argentina will replace Venezuela at the top of the list of countries where wage increases are highest. Soaring inflation in Venezuela means that despite companies there forecasting the second biggest pay rises in 2015, employees will see large salary decreases in real terms.
Salaries in Asia are expected to increase by 7.2 per cent in 2015 with the largest uplifts being given in Pakistan and the lowest in Japan. Factoring in inflation, real wage rises in Asia will average 2.7 percent – higher than the other regions surveyed. In mainland China, companies are planning to award 8 per cent salary increases again next year. Even after inflation, staff in China will be among the best off within the region and globally: they can expect to see increases of 5.5 per cent in real terms.
Employees in the Middle East are set to see wages rise 4.7 per cent on average. Of the African locations surveyed the highest salary rises will be granted in Egypt but are still lower than inflation forecasts leaving employees there to see their salaries decrease in real terms. In Australia, staff can anticipate 3.5 per cent salary increases again next year.
'Real terms' refers to wages that have been adjusted for inflation. Forecast inflation rates are based on information from the International Monetary Fund.
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