Private wage hikes to outstrip public sector, survey claims

New research has indicated that the rate at which private sector wages increase will be comfortably higher than that of the public sector in 2011, as the impact of government cutbacks begins to bite.

According to a survey published by recruitment agency Hay Group, private salaries will rise by an average of 2.5 per cent over the course of this year, compared to public sector wage inflation of just 0.3 per cent.

“Increasing wage budgets reflect gathering confidence in business conditions, but salary rises will remain behind inflation,” said Hay reward expert Claudia Canavesio. “The sizable gap in predicted pay rises … risks pricing public organisations out of the market.”

Ms Canavesio also highlighted the possibility of a “brain drain”, with top public sector talent switching sides to work for private companies to dodge wage cuts and possible redundancy.

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Yesterday (January 19th 2011), data released by the Office for National Statistics revealed that unemployment had inched to just under 2.5 million in the three months to November 2010.

Posted by Hayley Edwards