Private sector workers in the UK are set to receive a 2.4% increase in their salaries, according to Willis Towers Watson’s latest Salary Budget Planning report.
Since the beginning of the pandemic, companies were forced to revise down their pay rise plans, leading to average increases of 2.2% this year.
This year saw a third of private sector companies freeze pay increases due to curtailing costs, but this is expected to fall to just over 3% of companies in 2021.
Most organisations in the world’s major economies are anticipating higher pay rises in 2021 than this year, with the largest increase being expected in The Netherlands (2.5%) and Germany (2.4%), followed by Italy (2.1%), France and Spain (2%).
Keith Coull, senior director in Willis Towers Watson’s Global Data Services business, said: “After a difficult year for employers and employees – battling lockdowns, employee safety issues, working from home and declining revenues – many employers are finding ways to handle the crisis better, manage their businesses and help their employees with a more focused work and reward strategy.
“Many companies are looking ahead to 2021 with cautious optimism, which is reflected in slightly higher pay rise budgets than we saw this year.”
He added: “Not all industries have been impacted in the same way. While many technology and banking firms have been successful due to their ability to aid digital acceleration and financial liquidity, companies in the hospitality, leisure and airline industries have suffered.
“The differences in how companies were impacted by the pandemic are likely to be heavily reflected in pay rise levels too.”