Korn Ferry’s 2020 Salary Forecast has suggested that employees in the United Kingdom can expect a real wage increase of only 0.4 per cent – the lowest in Europe, according to. Across the continent, real wage growth will be lower for employees in Western Europe than for those in Eastern Europe, with average increases of 2.5 per cent and 6.5 per cent respectively.
While salary increases across the globe are expected to grow at about the same rate as 2019, lower inflation will result in stronger real wage growth. Salaries are predicted to grow at a rate of 4.9 per cent globally in 2020. With a global inflation rate of around 2.8 per cent that results in a real wage increase prediction of 2.1 per cent.
In the United Kingdom, wages are predicted to increase by 2.5 per cent. When set in the context of inflation predictions of 2.1 per cent, the suggestion is that real wages will increase by approximately 0.4 per cent. In contrast, forecasts for Italy and Germany expect real wage growth of 1.8 and 1.4 per cent respectively, whilst real wage growth in France is predicted to be 0.6 per cent.
Topping the tables across Europe, Turkey and Ukraine are set for real wage growth of more than 7 per cent. Across Eastern Europe more generally, employee salaries are expected to increase by an average 6.5 per cent in 2020. After taking inflation into account, real wages are forecast to rise by 2.6 per cent, up from 2.0 per cent last year. In Western Europe, workers can expect an average increase in the region of 2.5 per cent, and inflation-adjusted real wage increases of 1.2 per cent. This represents an uplift on last year’s real wage growth of 0.7 per cent.
“While inflation indices undoubtedly influence a company’s position on pay movements, they’re just one of many helpful reference points,’ says Tom Hellier, head of reward & benefits at Korn Ferry for the UK and Ireland. “We recommend that companies take a broader perspective when reviewing pay that considers business strategy, affordability, the socio-political, economic and regulatory climate, market pay data and, of course, general trading conditions.”