In the latest in its series of Snapshot Survey reports, announced in mid January, PwC estimated that the overall average for base salary increases in 2005 would be 4.6 per cent, slightly below the 2004 figure of 5 per cent, and that the figure for the IT/comms sector would be a mere 3.7 per cent, the lowest rate of increase among all sectors surveyed. However, this rate of increase is still larger than sector’s paltry 2004 figure of 3.5 per cent, making IT/comms one of the few sectors to show an increase on last year’s figure.
Banking and Financial Services are expected to see the biggest increases with a projected average increase of 5.4 per cent. However, this compares with a figure of 6.2 per cent, experienced last year.
Speaking at the launch, Mark Carter, Partner, HR Services at PricewaterhouseCoopers said: ‘For most organisations, workforce costs form the largest proportion of overall operating costs. Hence, the effective management of workforce compensation is a critical factor to ensure the profitable running of the business. Employers are continuously faced with the challenge of managing tight pay budgets whilst simultaneously managing the high expectations of employees. Quality remuneration benchmarking provides robust and reliable data, giving a rational frame of reference to assist employers in establishing, communicating and defending pay decisions.’
He continued: ‘There is growing confidence in the employment marketplace and as such pay will continue to be under the spotlight. Given the more optimistic employment climate entering into 2005, organisations can expect to come under renewed pressure to retain key talent.’
Frances Leavy, Senior Manager, HR Services, said:‘Overall, employers are expecting salary increases in 2005 to be slightly less than increases actually awarded last year 4.6 per cent compared to 5.0 per cent.. Yet again, we expect to see the Financial Services Sector awarding the highest salary increases in 2005 (5.4 per cent), with the IT/Telecoms sector planning to apply the lowest level of increase (3.7 per cent).’
However, he continued: ‘We need to be mindful that the predicted figure of 4.6 per cent for 2005 is likely to be even higher by the end of the year. In 2003, participants predicted that average increases for 2004 would be in the region of 4.5 per cent but the actual increases turned out to be higher (5.0 per cent). We find that this trend of predicting ‘low’ and actually awarding ‘higher’ continues year after year.
07/03/05
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