Whilst inflation has come down considerably, it has still averaged 2.7% so far this year.
The latest research from The Global Payroll Association (GPA), has revealed just how much you should expect when it comes to a pay rise in 2024, as Amazon becomes one of many major household names to announce a near 10% pay bump for tens of thousands of employees last week.
The e-commerce platform announced last week that it would be increasing minimum pay rates from £13.50 to £14.50 an hour, with staff who have been with the firm for three years or more seeing an increase to £13.50 an hour – although it did state that this would be location dependent.
It comes following a dispute with trade union GMB who describe the increase as ‘too little, too late’.
However, it does see Amazon join a number of other household names who have implemented or are set to implement notable pay rises in 2024, with The Co-op (7.3% to 10.1%), Tesco (9.1), Ikea (5%-10%), Asda (8.4%), Currys (9.5%), Lidl (5.4% to 14%), Sainsbury’s (9.1%), John Lewis (10%), Primark (9.1%) and Holland and Barrat (9.1%) all leading by example where Amazon has now followed.
But just how high should your pay rise expectations be in 2024?
Research by the GPA has looked at the current earnings across each region of the nation and just how much they need to increase to keep pace with inflation so far this year.
The research shows that whilst inflation has come down considerably, it has still averaged 2.7% so far this year.
With the average person in the UK earning an annual income of £35,404, this means that they should negotiate a pay rise of £956 in 2024 in order to see their wage keep pace with this current level of inflation.
Despite earning the highest average annual income in the nation at £47,301, its those in London who should be bartering for the highest pay rise, with a £1,277 pay increase required to keep pace with current inflation.
The South East isn’t far behind, with a £1,040 increase in annual earnings required, with this figure also topping £1,000 in the East of England (£1,006).
Here’s how the rest of the areas of the UK stack up when it comes to pay rise requirements to keep pace with inflation:
- Scotland – £910
- West Midlands – £894
- South West – £885
- North West – £873
- Northern Ireland – £863
- East Midlands – £860
- Yorkshire and the Humber – £854
- Wales – £823
- North East – £814
Melanie Pizzey, CEO and Founder of the Global Payroll Association, says:
“We’ve seen the economic picture stabilise in recent months, both with the end of election uncertainty, as well as the first interest rate cut in some years as inflation has eased. However, inflation has continued to creep up at an average rate of 2.7% so far this year and so it’s not unreasonable that employees may feel now is the time to ask for a pay rise.
What’s important to understand is that any improvements to the economy will take some time to filter down to the front line and so patience is a virtue in this respect, as the benefit of an improving economy may not be felt by their business for some months yet.
For employers themselves, it’s of course a positive to bump the pay offered, but this can’t be done at the expense of the company’s financial health. All too often we see examples where directors take huge bonuses whilst employee pay remains static and this is a very bad look for any business, but it can be just as detrimental to jeopardise the stability of the wider company to appease employee pay increase requests.
The balance sheet needs to be positive and employers should always benchmark what the going rate is with competitors, or within similar industries to ensure the pay they offer is fair.
When it comes to any communication with regard to pay, transparency and proactivity are key. There’s nothing worse than being left in the dark as an employee and sometimes the prolonged hope of a pay rise can cause more anguish than its denial.
These communications should happen in a timely fashion and on a one-to-one basis, for example, during individual performance reviews. Unless it’s a pay matter that concerns the entire organisation, in which case an all hands meeting can help set the record straight.”
