Only 2% of employers gave new recruits an above-inflation pay rise last year, according to a wide ranging jobs survey by the Chartered Institute of Personnel Development (CIPD).
The data has fuelled fears that real wage growth is still a long way off.
The survey revealed that only 42% of employers expect the basic rate of pay at their company to increase over the next year, down from 48% three months ago.
Only 2% of employers said that they had paid new workers significantly more, adding to concerns that job creation and skills shortages have failed to increase take-home pay.
The CIPD’s findings contradict other business surveys, many of which have suggested that earnings will accelerate through the second half of this year.
The CIPD say that their data is more accurate because other surveys fail to take into account “the large number of employers who are not carrying out pay reviews or are implementing pay freezes”.
Increases in real wages have only outstripped inflation twice since the financial crisis of 2008 – once in 2010, and in March last year.
Despite the lack of wage growth, the UK economy continues to create jobs at a very fast pace, with two thirds of employers planning to recruit over the next three months.
Mark Beatson, chief economist at the CIPD, said:
“The UK jobs machine powers on. Recruitment intentions are high, SMEs provide much of the fuel and we are seeing this all over the UK.”
Image by J D Mack