· 2 min read · News

Half of employees faced with 'pay cut' this year, through below inflation wage increases


Almost half (45.1%) of workers believe they will be hit by a pay cut this year as there is no chance of an above inflation wage increase according to research from consultancy NorthgateArinso.

The 2012 Global Pay Optimism Index found some of the lowest expectations for wage increases are to be found in the Eurozone (54.5%) while UK employees - in spite of being outside this economic region - are even less upbeat with 70% not anticipating an above inflation rise.

If this expectation is met, it will mean that the majority of people could lose money on their salary in 2012. With almost a third (28.5%) of respondents stating that the recession has caused them to stay in their job longer than they might have liked, generating staff loyalty must be a key priority for those wanting to retain top talent.

Globally there are marks of confidence. Workers in Asia Pacific are leading the pay outlook with over a third (36.5%) considering that there a positive signs of above inflation increases. This is compared to 21% of those in Europe and just 8.1% of those in the UK.

Although pay is the greatest motivator across all levels of business respondent, the majority are also interested in other benefits. However, over two-thirds (69%) of respondents said that in the economic downturn, their business is not adapting by increasing non-pay related benefits and, disappointingly 15.7% said that their business has said it would provide more flexible benefits but they are yet to see it happen.

The most popular non-pay related benefit that companies could introduce is flexi-working followed by employee benefits such as massages/yoga classes or personal trainers in the office.

Unifying the global employee landscape was a sense of equality with regards to the impact of the recession on pay. Just over two thirds of respondents (67%) felt that people at all levels had had their pay affected in some way and, if forced to choose, the most affected were judged to be those in junior roles such as executives, graduates and apprentices.

Interestingly, across all geographies C-Suite business leaders are most positive about future salary rises while consultants - those on one level about the entry level positions - are the most down beat with just 14.8% thinking they would be getting a 'real world' uplift this year.

Alex Kemp, COO NorthgateArinso said: "For 2012, pay optimism is centred around Asia Pacific with the 'realists' in the UK as well as the wider Eurozone having low expectations. With many businesses across the world still stretched to provide pay rises, business leaders should be asking about other ways to make sure that their talent feels valued. After pay, relatively low cost initiatives such as flexible working are hugely prized by employees and these are changes that companies can easily make to show how they value workers."

Research included over 1,300 respondents across United States, Canada, United Kingdom, France, Germany, Italy, Spain, Portugal, Denmark, Belgium, Finland, Norway, Sweden, Switzerland, Netherlands, China, India, Malaysia, Singapore, Australia and New Zealand in May 2012.