Almost four in 10 private sector employers are under no pressure to raise wages, says a new survey

Lucy White
Meanwhile Vodafone has found that 23 per cent of UK workers feel unproductive (Source: kschneider2991/Creative Commons)

A huge chunk of private sector firms are under no pressure at all to raise wages, according to a new survey from staffing business The Adecco Group and the Chartered Institute of Personal Development (CIPD).

While just 24 per cent of employers in the private sector are experiencing pressure to raise wages from the majority of their workforce, 38 per cent are not feeling the heat in the slightest, the survey revealed.

Productivity (or the lack thereof) appears to be behind the weak impetus to raise pay, as the most common reason given by employers for the absence of pressure was a recognition among workers that the business cannot afford to pay more.

Read more: Even more puzzling: UK productivity is now 15 per cent below the G7 average

Except from in a few specific sectors, difficulties accessing skills was not a problem. Only 29 per cent of all public and private sector employers with a vacancy reported it to be from skills shortages, suggesting pay pressure is unlikely to come from a lack of skills in the current labour market.

“This survey provides further evidence that productivity has a far more significant bearing on pay growth than the tightness of the labour market,” said Gerwyn Davies, CIPD's senior labour market analyst.

“Over time we might expect low unemployment levels to lead to increased pressure on pay, as the Bank of England has predicted. However, it’s the UK’s ongoing poor productivity growth that’s currently preventing employers from paying more, not their inability to find or retain staff.”

Read more: The UK is unlikely to see wage growth any time soon, according to a new report

In the public sector, a much larger 59 per cent of organisations said they are facing some push to raise wages for the majority of their employees.

Meanwhile, a survey from Vodafone revealed this morning that 23 per cent of UK employees said they felt unproductive at work, equating to seven million people in the workforce.

The research recommended that businesses create a “digital workplace” with up-to-date technology, allow employees to work from locations outside the office while staying in touch with their team, and streamline bureaucratic processes.

Read more: No matter what research says about the UK as a whole, productivity in London is actually pretty good

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