In the UK, employers are gearing up to raise wages by an average of 5 percent this year.

This move comes as a response to a growing trend where employers are making counteroffers to keep their existing employees, according to the Chartered Institute of Personnel and Development (CIPD), a representative body for Human Resource professionals.

This adjustment reflects a concerted effort to improve the financial prospects of employees across various sectors.

As companies face situations where their employees are being offered higher salaries by rival firms, the CIPD’s analysis highlights an interesting development. Around 40 percent of UK employers have actively engaged in counteroffers in the past year.

This strategic move is aimed at preventing valuable staff members from leaving for better pay elsewhere and maintaining a cohesive workforce.

A split approach

A closer look at these counteroffers reveals a split approach. Among the companies that have used counteroffers, 38 percent matched the salary offered by the competing job, while an intriguing 40 percent went beyond that, offering even more attractive compensation packages. This indicates a strong commitment to retaining their employees.

However, it is worth noting that not all employers are convinced about the effectiveness of counteroffers. About a third of employers expressed doubt that these counteroffers truly succeed in retaining their staff, hinting at a recognition of the complex factors that influence employee loyalty and engagement.

What about public sector pay?

The CIPD’s survey, which collected responses from 2,000 employers, also provides insights into the realm of public sector pay. The survey recorded an anticipated increase of 4 percent in public sector pay, marking a significant rise according to the CIPD’s findings. It is important to consider that this survey was conducted before the announcement of a larger, approximately 6 percent pay increase for millions of UK public sector workers. This subsequent update underscores the evolving nature of compensation trends and employee well-being.

The current trend among UK employers to boost wages by an average of 5 percent demonstrates a strategic effort to enhance employee motivation and organisational stability. The concurrent rise in counteroffers showcases the intricate interplay between external market pressures and internal talent retention strategies. This narrative of wage adjustments is set to shape the ongoing relationship between employers and employees, ultimately influencing the dynamics within the UK workforce.





Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.