A majority of employers expect to award staff pay rises of less than 3.5% in the winter pay round, according to the CIPD/KPMG quarterly Labour Market Outlook Survey.

The poll found that 58% of employers expect pay rises of less than 3.5%, with 32% expecting pay to rise on average by between 3% and 3.5%. Only 13% expect pay to rise on average by 4% or above.

The survey found that 82% of employers surveyed will be recruiting staff in the next three months, up from 79% in the autumn quarter. However, 46% of employers surveyed anticipate recruitment difficulties this quarter.

It found 42% of employers surveyed intend to recruit additional staff this quarter, however, there is an increase in the proportion of employers intending to make some staff redundant.

Dr John Philpott, chief economist at the CIPD, says: “Aside from the commonly observed tendency for some pay settlements to track the Retail Price Index seemingly regardless of the balance of supply and demand, a growing proportion of employers report difficulty in finding recruits with the attributes they are looking for. Lack of quality in the available labour supply might therefore mean that the market is tighter and potential wage pressure higher than measures of the amount of labour available suggest.”

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