"Wages will be the dog that doesn't bark" in 2011. This is the view of Bank of England Monetary Policy Committee (MPC) member Adam Posen, in the latest in a long line of paraphrasings of Sherlock Holmes' views on "the curious incident of the dog in the night-time" when contemplating the relationship between pay awards and inflation.Pay awards are showing some signs of renewed strength. The headline pay award was worth 2.3% over the three months to 31 March 2011. This is according to latest analysis from the XpertHR pay databank.
However, XpertHR pay specialist Sarah Welfare notes that looking ahead, "wage rises in the private sector are set to remain far below inflation over the coming 12 months." This is according to data from the 2011 XpertHR benchmarking survey on private sector pay forecasts (XpertHR Benchmarking subscription required), which reflects the widely held view that pay awards will not be pushed significantly higher by elevated inflation.
Key findings include the following:- Private sector employers expect the median pay award to be worth 2% (XpertHR benchmarking subscription required) over the year to 29 February 2012 (see chart).
- Organisational performance and
the ability to pay is by far the most important factor influencing pay
awards
(XpertHR benchmarking subscription required) over the year to 29
February 2012
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