UK workers look set to receive an average pay increase of 2.3% in 2016.
This will be the largest ‘real-terms’ salary rise since 2008.
This forecast follows research by Korn Ferry Hay Group. Whilst the rate of pay increase looks set to be at the same as this year (2.5%), the level of inflation is at only 0.2%. This means that UK workers will effectively receive a 2.3% raise.
The research paints a positive picture for the UK, but the rate of any salary increase is likely to vary from industry to industry. In the fast-moving consumer goods (FMCG) industry employees can expect their salaries to increase by 3% as consumer confidence increases. However, the low price of oil means that those in the oil and gas sector are set to receive pay rises of only 0.6%.
The lower level of inflation is the main reason for the real-terms rise in wages next year, but the Government is also helping to boost pay. 2016 will see the biggest increase to the National Minimum Wage since 2007.
Korn Ferry Hay Group predicted that European employees are set to receive an average salary increase of 2.8%. Workers in Ukraine and Russia will receive the biggest salary rises in Europe, but high inflation in those countries means that this will be a small raise in real terms.
Workers in China are set to receive the biggest real-terms wage increase of all with an average pay rise of 6.3%.
Hay Group consultant Adam Burden said that “the outlook is positive for workers” globally.
“The majority of UK employees should feel optimistic,” he said. “Despite the sector variations and the fact that we’re still catching up after several post-recession years of shrinking real wages there will be a tangible increase in real income for many.”