83% of workers expect salary increase in next 12 months amid cost-of-living crisis
Workers' expectations for pay raises in the coming year have surged, with more than eight in 10 workers (83 per cent) of them anticipating a salary increase within the next 12 months, either from their current employer or by switching jobs, according to a recent report by workforce management solution provider ADP.
On average, they expect an uplift of 8.3 per cent. However, just over a third of workers (34 per cent) are expecting to get pay rises of 10 per cent or more and one in 10 (10 per cent) expect more than 15 per cent.
The ADP® Research Institute’s People at Work 2023: A Global Workforce View Report explores employees’ attitudes towards the current world of work and what they expect and hope for from the workplace of the future.
Across the industries, professional services workers and those in the IT/telecommunications sectors have the highest pay rises in their sights next year (at 8.7 per cent on average), while leisure and hospitality staff anticipate the lowest (7.6 per cent on average).
In India, 90 per cent of workers expect a pay rise this year. On average, close to 20 per cent of the workers surveyed are anticipating an increase of 4-6 per cent, closely followed by 19 per cent expecting a 10-12 per cent increase.
The findings come amid the ongoing cost of living crisis and as workers in many countries demonstrate a willingness to take industrial action in order to force their employers to be more generous on pay and conditions. More than four in 10 workers (44 per cent) believe they’re underpaid for their job.
Demands for higher pay come after around six in 10 workers (62 per cent) were given a pay rise last year. Those pay rises averaged 6.4 per cent. Given that the International Monetary Fund’s (IMF) global inflation forecast for 2022 was 8.8per cent, this equates to a real-terms pay cut.
In India, 78 per cent of workers received a pay rise last year, and increases averaged 4-6 per cent. This year, even if there is an absence of salary hike, a substantial 65 per cent of employees express a desire for some form of merit bonus, paid holidays, or travel compensation.
According to Rahul Goyal, Managing Director of ADP India, getting a pay rise has become increasingly important, particularly for those in lower- and middle-income brackets. With the rising cost of living, disposable incomes have been affected, and even higher earners are feeling the pressure. People are struggling to afford essentials and are unable to indulge in luxuries due to the financial constraints caused by increasing interest rates, higher rents, and food costs. Though inflation may have reached its peak, it appears that it will take a while for it to return to more manageable levels.
“Employers have a difficult task weighing up the clamour for higher pay against their own challenges around rising costs and tightening profit margins. Workers are confident that they will get a pay rise from their current company – but if not, there’s a strong sense that they’ll be able to secure one by moving jobs. The implications for talent acquisition and retention are huge. As the recent spate of strikes in many countries across multiple industries has shown, many workers feel enough is enough. They are willing to take increasingly drastic steps by staging walk-outs to ensure they get their point across and force a suitable settlement,” he said.
Goyal added that employers who aren’t in a financial position to offer decent pay rises may have to think creatively about how to appease staff in other ways such as via offering greater flexibility or other benefits.
ADP Research Institute® conducted a survey of 32,612 workers in 17 countries worldwide, including over 8,613 individuals exclusively employed in the gig economy. The survey covered 7,721 respondents from the Asia Pacific region (including Australia, China, India, and Singapore), 15,290 from Europe (France, Germany, Italy, the Netherlands, Poland, Spain, Switzerland, and the UK), 5,751 from Latin America (Argentina, Brazil, and Chile), and 3,850 from North America (USA and Canada).