A forecast issued during December 2017 by the Hay Group division of Korn Ferry shows that salaries are to rise by only 1.5% globally, when adjusted for inflation. This is considerably down on 2017’s prediction of 2.3% and 2016’s prediction of 2.5%.
The figures were calculated using Korn Ferry’s pay database and according to their website, contains data from more than 20 million job holders in 25,000 organizations, across more than 110 countries. Using predicted salary increases for 2018 as forecasted by global HR departments and comparing them to predictions made at this time last year regarding 2017, it also takes into account 2018 inflation data from the Economist Intelligence Unit.
In the US, an average increase of 2.8% is predicted – this is about the same as last year. However, when adjusted for inflation (expected to be 2% in 2018) the real wage increase is only around 0.9% - which is down from 1.9% last year.
Western Europe, which incorporates the UK, fairs less well with an average increase of 2.3% predicted and the inflation-adjusted real wage giving an increase of only 0.9%.
Bob Wesselkamper, who is Global Head of Rewards and Benefits Solutions at Korn Ferry stated:
"With inflation rising in most parts of the world, we're seeing a cut in real wage increases across the globe."
"On average, employees are not seeing the same real pay growth they did even one year ago."