Wage growth in the UK will rise to three per cent in 2015, a new report reckons – that's 0.5 percentage points higher than the average increase in 2014.
Set against inflation, which is forecast to average out at 0.2 per cent in 2015 (by some estimates, we may even slip into deflation), the research, by professional services giant Towers Watson, suggests workers will feel "less pressure on disposable incomes". You can say that again…
If you work in certain skilled jobs with a smallish talent pool, pay growth may be even higher, the report found – with the highest pay deals in roles such as research and development in the pharmaceutical sector and high-tech professionals. After several years of muted wage growth – much of which has been well below inflation – it's good news for workers. Although figures published by the Office for National Statistics last week showed wage growth including bonuses had slipped to 1.7 per cent in the three months to February, down from 1.9 per cent in the three months to January.
Nevertheless, Paul Richards, head of Towers Watson's data services practice in Europe, the Middle East and Africa, pointed out that more competition among employers has pushed up salaries.
Pay growth is increasingly being driven by factors such as the competition for talent, economic growth expectations and also the shifting weight of base salary or guaranteed cash within the overall reward package against other elements such as car allowances and performance-related bonuses.