UK employers expecting to award pay rises of 3% this year, survey shows

theguardian.com:

British employers are expecting to award pay rises of 3% in 2022, the highest in at least a decade, though well below the rate of inflation, as they try to recruit and retain workers, according to a new survey of businesses.

The expected pay rise comes amid persistent signs of a tight labour market, with almost two-thirds of employers expecting to have difficulties filling job vacancies in the coming six months, according to a survey of more than 1,000 recruitment and human resources workers by YouGov for the Chartered Institute of Personnel and Development (CIPD).

Pay growth has risen sharply higher than it was before the pandemic, thanks in part to the pace of the economic recovery following coronavirus lockdowns at the start of the pandemic in 2020.

Average weekly earnings rose by 4.2% year on year in the three months to November 2021, faster than at any point between the financial crisis in 2008 and the start of the pandemic in 2020, according to the Office for National Statistics. The latest data on wages and employment will be published on Tuesday, with economists expecting pay growth to slow, but remain above pre-pandemic levels.

The CIPD reported that more than two-thirds of recruiters were expecting to hire by the end of March, and that plans to make workers redundant were lower than before the pandemic.

Almost half of the recruiters surveyed said they were struggling to fill vacancies, and 41% said more staff were leaving – a phenomenon that has been dubbed the “great resignation” as workers look for better opportunities elsewhere. As well as headline pay rises, workers have been able to win other benefits, ranging from hybrid working at home or offices to a four-day week with no loss of pay.

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