UK forecast for lowest real wage increase in Europe, Korn Ferry reveals
Next year employees in the United Kingdom can expect a real wage increase of 0.4% that will be the lowest in Europe, according to Korn Ferry’s 2020 Salary Forecast. Across the continent, real wage growth will be lower for employees in Western Europe than for those in Eastern Europe, with average increases of 2.5% and 6.5% respectively.
While salary increases across the globe are expected to grow at about the same rate as 2019, lower inflation will result in stronger real wage growth. Salaries are predicted to grow at a rate of 4.9% globally in 2020. With a global inflation rate of around 2.8% that results in a real wage increase prediction of 2.1%.
In the United Kingdom, wages are predicted to increase by 2.5%. When set in the context of inflation predictions of 2.1%, the suggestion is that real wages will increase by approximately 0.4%. In contrast, forecasts for Italy and Germany expect real wage growth of 1.8 and 1.4% respectively, whilst real wage growth in France is predicted to be 0.6%.
Topping the tables across Europe, Turkey and Ukraine are set for real wage growth of more than 7%. Across Eastern Europe more generally, employee salaries are expected to increase by an average 6.5% in 2020. After taking inflation into account, real wages are forecast to rise by 2.6%, up from 2.0% last year. In Western Europe, workers can expect an average increase in the region of 2.5%, and inflation-adjusted real wage increases of 1.2%. This represents an uplift on last year’s real wage growth of 0.7%.
Tom Hellier, head of reward & benefits at Korn Ferry for the UK and Ireland, said, “While inflation indices undoubtedly influence a company’s position on pay movements, they’re just one of many helpful reference points. We recommend that companies take a broader perspective when reviewing pay that considers business strategy, affordability, the socio-political, economic and regulatory climate, market pay data and, of course, general trading conditions.”
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