Median base pay is expected to rise by 5% in 2023, signalling the largest average salary increase in a decade.
According to the latest Labour Market Outlook Survey, projected pay increases for UK employees is set for a new record high, based upon the CIPD’s quarterly employment barometer.
However, expected pay increases still fall below the rate of inflation, meaning that employees will continue to feel the pinch from the cost of living crisis.
Moreover, the 5% increase to median pay only applies to the private sector, with public sector employees anticipated to receive a measly 2% uplift on their salaries.
CIPD’s Labour Market Outlook Survey
The survey of 2,012 employers gives an insight into the pressures facing UK business owners.
Most notably, the survey results reveal that:
- 71% of employers expect to hire in the next three months
- 57% of employers said they have hard-to-fill vacancies
- 55% of employers report that they expect to raise base or variable pay further in 2023
- 57% of expected hirers (that plan to raise pay) will seek to achieve this by increasing prices
Discussing the research insights, Jon Boys, Senior Labour Market Economist for the CIPD, remarked: “Skills and labour remain scarce in the face of a labour market which continues to be surprisingly buoyant given the economic backdrop of rising inflation and the associated cost-of-living crisis.
“It’s positive to see many employers taking steps to tackle skills shortages by upskilling existing staff and hiring apprentices.
“However, the UK Government could provide much-needed support by making the Apprenticeship Levy more flexible, to boost employer investment in training and reverse the decline in apprenticeship starts we’ve seen in recent years.
“Many employers are recognising the potential to attract certain groups to fill vacancies – particularly older workers, carers and those with health conditions – but this also requires a focus on improving job quality, particularly flexibility.
“The forthcoming introduction of a day one right to request flexible working should prompt more employers to ensure that they advertise jobs as flexible and provide a range of flexible working practices to attract and retain a more diverse workforce.
“However more needs to be done to help provide employers, particularly SMEs, with access to occupational health services or support, to help them to keep our ageing workforce healthy and in work.”
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