While salary increases across the globe are expected to grow at about the same rate as 2019, lower inflation will result in stronger real wage growth. Salaries are predicted to grow at a rate of 4.9 percent globally in 2020. With a global inflation rate of around 2.8 percent that results in a real wage increase prediction of 2.1 percent.
In the United Kingdom, wages are predicted to increase by 2.5 percent. When set in the context of inflation predictions of 2.1 percent, the suggestion is that real wages will increase by approximately 0.4 percent. In contrast, forecasts for Italy and Germany expect real wage growth of 1.8 and 1.4 percent respectively, whilst real wage growth in France is predicted to be 0.6 percent.
Topping the tables across Europe, Turkey and Ukraine are set for real wage growth of more than 7 percent. Across Eastern Europe more generally, employee salaries are expected to increase by an average 6.5 percent in 2020. After taking inflation into account, real wages are forecast to rise by 2.6 percent, up from 2.0 percent last year. In Western Europe, workers can expect an average increase in the region of 2.5 percent, and inflation-adjusted real wage increases of 1.2 percent. This represents an uplift on last year’s real wage growth of 0.7 percent.
Tom Hellier, Head of Reward & Benefits at Korn Ferry for the UK and Ireland said: “While inflation indices undoubtedly influence a company’s position on pay movements, they’re just one of many helpful reference points. We recommend that companies take a broader perspective when reviewing pay that considers business strategy, affordability, the socio-political, economic and regulatory climate, market pay data and, of course, general trading conditions.”
About the study
The data was drawn from Korn Ferry’s pay database which contains data for more than 20 million job holders in 25,000 organizations across more than 130 countries.
It shows predicted salary increases, as forecasted by global HR leaders, for 2020 and compares them to predictions made at this time last year regarding 2019. It also compares them to 2020 inflation forecasts from the Economist Intelligence Unit.
Our interactive site with more detailed figures, and a downloadable infographic with headline figures for each country is here.