UK employers plan for lower pay awards in 2024 as wage pressures ease
By Esther Enyinnaya | Incomes Data Research
Most UK employers are planning lower pay awards in 2024 than they made this year, but these pay rises are nevertheless likely to be higher on average than those awarded pre-pandemic, according to new research from Incomes Data Research (IDR).
The results of our Pay Planning for 2024 survey indicate that over half of the respondents are planning for a decrease in the level of 2024 pay awards, compared with those in 2023, due to some easing of upward pressures on pay – mostly as a result of falling inflation but also owing to subtle shifts in the labour market.
Pay award predictions for 2024
Employers are planning for lower pay awards next year, as upward pay pressures ease because of an expected fall in inflation in the UK economy.
This contrasts with previous employer plans for pay. This year, for example, saw higher pay awards overall than 2022. The main factors behind this year's outcomes were, of course, high inflation but also a tight labour market and the consequent impact on recruitment and retention.
Results from our latest survey show that employers plan to reduce pay awards if inflation falls as forecast in 2024.
· Only 8% are planning on paying higher awards in 2024, with the majority (53%) planning lower awards (Box 1).
· These plans for relatively lower pay rises are a result of somewhat reduced upward pressures on pay, mainly due to falling inflation.
· This year's key findings contrast sharply with those from our previous annual survey. Then, only 10% of employers predicted making lower awards with the majority (56%) expecting that they would make higher pay awards. Indeed, other findings from this year’s survey showed that over two-thirds (69%) did in fact pay a higher award than in 2022...
