• This topic has 83 replies, 67 voices, and was last updated 2 days ago by dazh.
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  • Private sector salary increase expectations
  • poly
    Free Member

    Had a meeting yesterday with some senior people in the business.  They are worried that the workforce are going to expect 10% pay increases because of the cost of living.  For at least the last decade we’ve paid 2.5-3% on average (awards are made individually not collectively but that’s what the total pot has increased by).  My gut feel is that nobody was expecting pay to hold pace with cost of living, otherwise it wouldn’t be a cost of living crisis.  However if they don’t go higher than they usually do they will face a retention problem by 2024. Really “the market” will determine what they have to offer…

    so U.K. private sector people – what are you expecting your salary to increase by in 2023 and has your company already announced it / discussed it internally?

    lamp
    Free Member

    In the private sector 10% increases are pretty much unheard of unless a change in role…let alone when we’re on the brink of recession….i’d reset the expectation at around 3-6%.

    kerley
    Free Member

    I am expecting the same 2-3% I have got for the last 20 years. I may be surprised though I guess.

    mert
    Free Member

    My union has already told the company to go away and think long and hard after their initial offer for 2023.
    We’ve just come out of a three year deal with ~2% annually, and some optional contract changes that could net you up to 15% plus some extras (holiday, pension).

    So i suspect they’ve offered some “normal” amount of ~3% based on official inflation/cost of living figures, and promptly been told to try again, or maybe been laughed at.

    Company is also making money hand over fist and is (i think) the most profitable it’s ever been.

    benpinnick
    Full Member

    I blanket increased everyone here by 5% irrespective of their normal date for review before the inflation started to really hit the fan on the basis that they could all get a boost now, but don’t come asking again if it gets worse for a while as obviously revenues will fall and costs will rise making more unachievable. Seemed to be well received. All those things of course came true but we’ve had a while to adjust to our new cost base as have the staff.

    FunkyDunc
    Free Member

    I guess it should be based on what your competitors are prepared to pay ? I used to work in an industry where we had a mass exodus of engineers. When they started asking why it was just a competitor was offering considerably more hourly rate. We knew they couldn’t sustain that rate but it lost us alot of highly skilled engineers !

    The public sector (well NHS) is loosing and not attracting people at the minute as pay is so in favour of the private sector.

    squirrelking
    Free Member

    My union has already told the company to go away and think long and hard after their initial offer for 2023.
    We’ve just come out of a three year deal with ~2% annually, and some optional contract changes that could net you up to 15% plus some extras (holiday, pension).

    So i suspect they’ve offered some “normal” amount of ~3% based on official inflation/cost of living figures, and promptly been told to try again, or maybe been laughed at.

    Company is also making money hand over fist and is (i think) the most profitable it’s ever been.

    Do we have the same employer? More Together and all that…

    tomhoward
    Full Member

    I got 10% in Jan just gone, but that’s more a reflection on how low the salary was to begin with, and they were worried I might leave.
    They were right to be worried, just weren’t worried enough. I start with a new company in a couple of weeks, but same role, 10% increase in salary, plus a decent commission on top.

    johndoh
    Free Member

    In my industry salary expecations are becoming eye-watering – whereas graduates were expecting £18-£23k two years ago, they are expecting £28-£32k now (digital industry). We had one person (mid-weight engineer) turn down an offer of £48k as he said he ‘needed £58k a year to survive’. I have no idea if he has got a job yet but I wouldn’t be surprised if he has.

    We’re just about to increase our prices across the board by 10% – the second time we have had to do it in 12 months after keeping the same rates for 5+ years before that.

    theotherjonv
    Full Member

    we’re still in discussion, part of the workforce is union and the union negotiates on everyone’s behalf. Normally rises are effective April, it’s now Sept although everyone got a one-off payment a month or so ago against what will eventually be owed in back pay to help out.

    We have PRP and depending on your EoY review that dictates the increment you get; part of the renegotiation is actually the membership asked for the union to negotiate a lower increase* but put in place underpins. That way the lower paid (ie more junior) will see more on a % basis which seems fair to me, in the end absolute £ pays bills, not %

    TLDR; somewhere between 4 and 5% but the underpins means that lower zone workers (technicians, administrators, etc.) will be seeing more like 7-10% depending on their EoY rating.

    * in fairness, they asked for a higher increment AND underpins but equally accepted there is a finite pot for increases against a backdrop of being a large energy user, etc. so I’m actually reasonably ‘proud’ if the union membership agrees to a settlement that says ‘actually, give us a bit less so you can give a bit more to those that need it most’

    stumpy01
    Full Member

    A few of the whingers at work keep bleating on about the cost of living & how unfair it is that we haven’t been given a 10% pay rise.
    They don’t seem to understand that this salary hike becomes baked in, once applied & becomes an extra cost forever more.

    We normally have pay reviews around Jan time & normally get a few % if we get anything. Hopefully we’ll get a bit more than that this year (the company is currently doing pretty well), but I won’t be expecting it.

    10% pay rise would be nice, but isn’t going to happen.

    james-rennie
    Full Member

    Our last 3 years have been 2% 2020, 1% in 2021, 3% in 2022. Also noteworthy that the lowest pay bands got 5% this year instead of the 3% everyone else got. In IT and associated areas there’s been a bit of an exodus recently, lots of teams are under staffed and I think that’s more likely to drive a higher 2023 rise than the cost-of-living.

    stevextc
    Free Member

    so U.K. private sector people – what are you expecting your salary to increase by in 2023 and has your company already announced it / discussed it internally?

    I’m out now … however

    They were right to be worried, just weren’t worried enough. I start with a new company in a couple of weeks, but same role, 10% increase in salary, plus a decent commission on top.

    My expectations for a long time were that you’d get as little as they could get away with and there is no point slogging yourself to death when another company that’s doing the same to its workers will give you 10% more.

    In the past many companies (my last one included) adapted by pre-emptively just getting rid of the bottom x% of performers every year (often with KPI’s that the employee had no control over) and bringing in new inexperienced replacements or just not replacing. This was adapted to by even more churn…

    I expect to see a mix of any and all of the above in the current high CoL/low unemployment.

    jamiea
    Free Member

    In the private sector 10% increases are pretty much unheard of unless a change in role…

    Our production staff had 10% across the board last year…

    TheBrick
    Free Member

    10% pay rise would be nice, but isn’t going to happen.

    Yeah I think a lot of people (quite understandably) expect a pay rise so everything stays the same. Not understanding the price (in a general term not just ££) of that

    mrchrispy
    Full Member

    I think it’ll be tight at our place but we had a 10% bump earlier this year so is kinda keeping pace with inflation so far. its going to depend on how crazy things get over the next 12 months.

    theotherjonv
    Full Member

    <unpopular opinion> – last time I expressed this I was accused of being condescending but I’ll say it again.

    Energy costs and knock on pricing has been artificially low for a while now. Interest rates likewise. People have had a lot of disposable income as a result. Rather than budget on the basis it wouldn’t last for ever, I think many have spent all the spare – PCP’s being an accident now waiting the happen as an example. Maybe expensive e-bikes too…..

    There are for sure millions that weren’t in that situation and weren’t ‘wasting’ their excess because there wasn’t any excess. I’m hugely concerned and sympathetic. There are however other millions that could have seen this coming, built a war chest or paid down mortgages and chose not to, and now are facing a crisis if they are still committed to what they spent (eg: PCP)

    So this might be smug / condescending, but I’m not seeing the full impact of 10% inflation, because I know prices were too low before and used some of that to insulate against the coming storm.

    cheddarchallenged
    Full Member

    What the otherjohnv said.

    For many companies, awarding a pay rise matching inflation will translate to job losses next year – companies are dealing with inflation across all costs so reducing headcount is one of the few options to balance the books.

    I’m self employed but held my 2021 rates for this year partly to ensure I’m not pricing myself out of the market.

    mert
    Free Member

    Do we have the same employer? More Together and all that…

    Unless you’re in the automtive sector and living in Sweden, unlikely…

    5lab
    Full Member

    We had a total of 9% pot last year, having been 0% the year before (midway through covid). I expect we will be looking at 6-8% this year. Interestingly I work for a us company so our salaries in the UK have dropped by 15% on the dollar so far this year, so they don’t really have an excuse about not being able to afford it over here..

    the-muffin-man
    Full Member

    I think it massively depends on the business.

    Huge business making millions in profit, then go for what you can get.

    Small business struggling to survive with ever rising bills, perhaps be more realistic in what they can afford.

    johndoh
    Free Member

    Small business struggling to survive with ever rising bills, perhaps be more realistic in what they can afford.

    However employees aren’t going to accept that – we are a small-ish business (18 full time staff) and pay what we can and try to remain competitive but other larger businesses can afford to pay more than we can afford and our team aren’t going to stick around for fun if they can get a decent increase to cover the rising cost of living.

    EhWhoMe
    Full Member

    Cost of living pay rises should be a set amount, never understood % as it just widens the gap, last time i looked petrol,milk food etc was the same price for the MD on 130k as it is for me on 25k…his hot tub and love of fine wine are choices.

    So a company should say we can afford x amount divide by number of employees

    Aidy
    Free Member

    There are however other millions that could have seen this coming, built a war chest or paid down mortgages and chose not to, and now are facing a crisis if they are still committed to what they spent (eg: PCP)

    You could argue the same for employers though

    doris5000
    Full Member

    <cries in public sector>

    EhWhoMe
    Full Member

    Also can the massive companies not just think we will accept lower profits for a while to help, raise wages but not raise prices, this would help a lot imo argued this with a mate whos company make 12m wage rises are gonna cost 900k so is 11.1m profit still not ok for a year or two.
    This of course does nit take greed into account

    andy4d
    Full Member

    Our place has given 5% to the lower paid roles and 3% to the higher paid roles, they have also increased the starting point of the salary scale which has meant some lower paid colleagues were getting 10-15%. Some better paid colleagues (but not exactly high earners) are not overly happy but I think it’s fair enough to try and help the colleagues at the lower end of things in these times if there is not enough money in the pot for everyone.

    oldtennisshoes
    Full Member

    I’ve recently taken on a new contract in the Private Sector after almost working exclusively on Government stuff for the last 20 years. It was a significant rate hike over the current Public Sector day rate contract rates.

    andybrad
    Full Member

    ill be honest ill just be happy to keep my job at the moment!

    EhWhoMe
    Full Member

    Nice to hear andy4d,

    Im with theotherjon aswell, the huge houses bought over 35yr mortgage at low int rate was never going to work, what should have happened was buy the house you would have bought when rates where higher and thus be able to afford the inevitable increases, but people could not resist, same as all the 50-60k cars

    argee
    Full Member

    Think we’re just in for a tough couple of years, there are far too many parameters to work out whether companies can increase wages, whether the funds available are going to the right people to provide benefit and so on, we tend to be very one dimensional with our thinking, i.e. that those in the lower bands (under 20k) are on the breadline and need additional support, or those earning 50k are comfortable.

    Personally for where we are now, i can’t see a lot of companies adding fixed pay rises as high as 10%, one off bonus payments, or additional RRA or the likes might be more beneficial for the company, especially as we’re seeing it across industries. Of course, there will be companies that can provide 10% pay rises, some already have, but small to medium businesses are going to struggle as always, and like previous times, we could see a workforce being reduced to give those left pay rises!

    It is a horrible time though, this type of climate tends to be where the big get bigger and the small get subsumed, and we end up with less competition in the long run.

    ta11pau1
    Full Member

    5% across the board, company wide at the end of 2021, then I’ve just had another surprise bump of just under 6%, plus I changed role in January and got roughly a 9.5% rise thanks to that promotion.

    Most of our staff (a certain job level and below) also got a extra £750 cost of living payment this month too.

    So yeah it’s been a decent year for me in terms of pay increases, but definitely nowhere near a 10% annual rise.

    cookeaa
    Full Member

    The union has apparently been negotiating for ages, long enough for inflation to ramp up, prior to this we were typically seeing ~3% based on a performance reviewing formula that was ready for an overhaul itself.

    Staff expectations are tricky to gauge talking to colleagues at the minute, I don’t think anyone expects a single year 10%+ rise to match 2022 inflation. But it’s got to exceed the previous ~3% average, simply for staff retention if nothing else. I reckon they’ll land on some sort of three year deal in the 6-9% range with some sort of performance related thing 6% if you’re basically doing your job more if you’re excelling. the idea being inflation will settle by Q4 2024 and the nominal pay increase will seem generous at that point…

    One big question is still hanging over back dating the increase to April, the longer the negotiation the bigger that initial lump will be…

    My previous employer just did 2%, the odd bonus for nepotism, and a polite suggestion that you might want to polish up your CV if you felt you were worth more, which most of our team duly did…

    My missus works for the local authority so I think she got 1.5% or something in ~2020(?), the first increase in years and then was promptly told Covid and COL means they shouldn’t expect anything more this decade (paraphrased). Oh and they’re going to downgrade her role… So I can’t really complain.

    thisisnotaspoon
    Full Member

    There are however other millions that could have seen this coming, built a war chest or paid down mortgages and chose not to, and now are facing a crisis if they are still committed to what they spent (eg: PCP)

    Im with theotherjon aswell, the huge houses bought over 35yr mortgage at low int rate was never going to work, what should have happened was buy the house you would have bought when rates where higher and thus be able to afford the inevitable increases

    I’m sure that could be leveled at some people, but most people are in the opposite scenario, living in the house they can afford rather than the one they want. A 2 bedroom terraced new-ish build in the not-awfull bits of Reading is £325k-£385k (Earley, Woodley, Winnersh, Caversham, South of the M4). That’s the first rung on the property ladder for those graduates, teachers, nurses etc. Not McMansions for nearing retirement GP’s and MD’s. Low ‘costs’ in other areas just drove competition for other resources (i.e. housing) up.

    You’re deluded if you think the poor-ish / working classes are responsible for this crisis. They’re just fighting amongst themselves over an insufficient supply of housing.

    dday
    Full Member

    As someone pointed out earlier, salary increases get baked in long term, not to mention bonuses tied to those salaries. My company (US based) had a very profitable year. They acknowledged the inflation and cost of living increases, but salary increases were pretty much inline with previous years (2% – 5%) however, bonuses were pushed up over 100% in many cases (depending on performance). Short term gains, but 10% seems high for any sector at the moment.

    chrismac
    Full Member

    3% for us. Our vulture capitalist owners want all they can squeeze out of the company for themselves

    kimbers
    Full Member

    Public sector here and it’s been a decade of below actual inflation pay rises

    I’ve just moved jobs to a better paid institute & seen a decent but necessary salary bump -probably the best paid research institute in the country, yet they are still struggling to recruit at every level.
    Universities & research institutes across London are really in trouble, multiple crucial roles unfilled & no room for salary increases that people desperately need.

    reluctantjumper
    Full Member

    I’ve only been at my current place 7 months so not sure what rise they normally get but I do know they got a £1k increase across the board and a £750 COL payment in August, which I also got. There’s talk of a 2% increase in January but that won’t be enough for me, others have voiced the same opinion. If it’s any less than 5% then I will have to look at moving which is a shame as the job itself is good with a decent group of people. No union involved to argue out case as it’s a Japanese company which might be in our favour. I do know they struggle to retain and recruit (my job was available for over a year, unheard of for a driving position) so if I get my chance to put my view across that’s something I can use.

    stingmered
    Full Member

    I had lunch with our CEO yesterday (US engineering firm circa 60,000 people) and I raised this exact point. Last year the ‘cost of living’ increase was just under 3% on average. It’s not actually termed a cost of living increase, it’s merit based, decided locally against an overall budget. On average, most people got about 3% with adjustment for high and poor performance. We talked about expectations etc. and I think we both agreed that whilst nobody was seriously expecting 10%, there is an expectation that it will be higher than normal. However, the CEO did say that there would be a strong recommendation to skew the pay increase % to those at the lower end of the pay grade so that they receive a bigger increase % wise, recognising that for those at the higher end of the pay-scale (and I count myself lucky to say that includes me) the expectation is to suck it up. Annoying (personally), but I think fair overall. Also talked about giving some discretionary one off payments to help people cope with the current inflation pressures, presumably in a bid to alleviate long term unsustainable salary costs once inflation settles down.

    doomanic
    Full Member

    We got 3% this year, plus £75pcm to help with fuel costs for the staff who can’t WFH.

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