UK private sector workers are set to receive an average pay rise of 2.4% in 2021, according to Willis Towers Watson’s latest Salary Budget Planning report.
The survey was conducted online between October and November 2020 with over 18,000 sets of responses received from 130 countries worldwide.
The report summarised the findings of Willis Towers Watson’s annual survey on “salary movement and reviews practices” as a means of helping companies with their “compensation planning”.
The survey recorded that a third (33%) of private sector companies planned on freezing pay increases, however this is expected to fall to just over 3% of companies in 2021.
The most industries in the UK with the least amount of pay rises expected were leisure and hospitality, offering just 1.4% average wage increases in 2021, construction, property and engineering (1.8%) and automotive (1.9%).
This contrasts with the industries that are most optimistic about next year’s prospects which includes insurance (2.9%), fintech (2.8%) and business and technical consulting (2.8%).
Retail is reportedly among the industries that expects the highest pay rises in 2021, at 2.9%, which the group claimed was reflection on increases in online retailers, and a reaction to the high number of pay freezes (48%) taking place this year at others.
Keith Coull, senior director in Willis Towers Watson’s, said: “Many companies are looking ahead to 2021 with cautious optimism, which is reflected in slightly higher pay rise budgets than we saw this year. Many companies are looking ahead to 2021 with cautious optimism, which is reflected in slightly higher pay rise budgets than we saw this year.
“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.”
He added: “The differences in how companies were impacted by the pandemic are likely to be heavily reflected in pay rise levels too.
“We are also expecting many companies to be differentiating their allocation of pay rises so that they can provide meaningful salary increases to their best and most valuable talent and prioritise spending on jobs that are likely to contribute the most to success or survival next year.”