UK average salary projections for 2019
Anyone who has tried to work out anticipated salary increases knows they are on to a hiding to nothing. Newspaper articles are regularly broadcasting recent settlements as if they are the standard rise for all employees. The problem with articles such as this is that they are often based on a small sample size and the rate quoted very much depends on which industries are settling at the exact time that the paper wants to publish the article. So if that is the case, what’s the point in trying to predict the average UK pay rise for 2019?
Well the obvious answer to the above question is that every organisation needs to try and assess what it will spend over the coming financial year. So we try, as best as we can, to anticipate what the increase will be, often significantly in advance of the actual internal budgeting process taking place. The major consultancy firms, Mercer, Willis Towers Watson, Korn Ferry etc, then take a sample of their customers’ predicted increases to give an average expected increase. So whilst there is some merit in this, often it is a bit finger in the air, but it is the best we have to work with.
Also think about your Reward strategy when setting a budget. How will you deal with performance related pay for example? If you plan to reward for performance then the average UK pay rise won’t give you much to work with.
What then is the likely average UK pay rise for 2019?
Even taking into account what we’ve said above, the surveys are giving a fairly consistent view. The predicted increase for 2019 in the UK is around 3%. Slightly lower than the USA but higher than Western Europe (with the exception of Germany). CPI is falling so this has the added bonus of giving an actual real salary increase for employees.
Don't mention the 'B' word
Of course, the slightly large elephantish shaped creature that’s hovering around the fridge freezer is Brexit. Whilst unemployment is low and therefore skills are getting scarcer, we frankly have no idea what’s going to happen on 1 April 2019. Nor do we have any clue how UK PLC. will react to the eventual agreement or lack of. So take the 3% UK average pay rise as best guess for now but don’t take your eye off the ball.