UK wage growth to remain weak over the next year
According to a recent survey by the Chartered Institute of Personnel and Development (CIPD), UK wage growth is likely to remain weak over the next year.
Basic pay award expectations for the next 12 months remain at just 1%.
The CIPD said that an increase in labour supply over the past year is a key factor behind the modest pay projection.
For every low-skilled job available there were 24 applicants, while for every medium-skilled job there were 19 candidates and for every high-skilled job vacancy there were eight applicants.
“The increase in labour supply may explain why the jobs market remains challenging for some jobseekers, especially those seeking lower-skilled jobs,” the CIPD said.
Gerwyn Davies, Senior Labour Market Analyst for the CIPD, the professional body for HR and people development, commented:
“Predictions of pay growth increasing alongside strong employment growth is the dog that hasn’t barked for some time now, and we are still yet to see tangible signs of this situation changing in the near-term. The facts remain that productivity levels are stagnant, public sector pay increases remain modest while wage costs and uncertainty over access to the EU market have increased for some employers. At the same time, it is also clear that the majority of employers have still been able to find suitable candidates to employ at current wage rates due to a strong labour supply until now.
“The good news is that the UK labour market continues to go from strength to strength. This is particularly good news for jobseekers, especially the long-term unemployed, who have recently been able to move into work more quickly than in the past. We believe therefore that the Bank of England was right to give more weight to the prospects for pay and productivity than to the rise in employment in their recent interest rate decision.
“Against the backdrop of future migration restrictions and a tight labour market, the need for a workforce development plan is greater than ever.”