Salaries in the private sector are unlikely to keep pace with inflation next year as employees’ motivation falls, claims a study.

Salaries in the private sector are unlikely to keep pace with inflation next year as employees’ motivation falls, claims a study.

After this year’s pay freezes, salary increases in the private sector next year are likely to be just 2 per cent, finds the report from management consultancy Hay Group.

Public sector workers will be even worse off with pay inflation of 1 per cent as the government struggles to balance the books.

Stuart Hyland, reward specialist at Hay Group, says that wage inflation is at its lowest level since records began, despite consumer prices rising at about 2.5 per cent.

Adds Hyland, ‘Job uncertainty and long hours have taken their toll, and employees are looking for something back from their employers in return for their efforts. Diminishing pay in relative terms… will be a hard sell for employers.’

The research finds that 36 per cent of employees are unhappy in their current role, while 33 per cent are actively looking for a new job.