Private sector employers are expecting minimal pay increases in the near future, according to new research from XpertHR.

The survey questioned 127 private employers, employing 86,164 people, about their pay intentions for the 12 months to the end of February 2014. The median pay increase prediction for the next year was found to be 2.5 percent, taking into account both basic and performance-based pay. This figure fell to two percent when just basic pay increases were counted.

Other findings of the survey:

Many employees have come to expect pay increases and the lack of a ‘suitable’ salary rise may cause them to start looking elsewhere. If employers cannot afford pay rises then they should look at the possibilities of introducing cost-effective benefits to show employees appreciation without the associated financial costs of increasing salaries. Transparency is key, of course – if companies can’t afford to increase salaries they should make this clear to staff, otherwise they may just think the issue is being brushed under the carpet.

XpertHR Pay and Benefits editor Sheila Attwood said: "Employees look set to experience yet another year of anaemic pay rises. With two percent to 2.5 percent likely to be the going rate for the foreseeable future, inflation continues to outpace wage increases, with most employees seeing their pay fall behind in real terms."