Wage growth is directly related to UK worker’s productivity, research suggests

Employees will only get some visible, substantial pay rises should their productivity levels increase substantially, research published by the Chartered Institute of Personnel and Development (CIPD) suggests.

According to a media report on the matter, ever since January 20089, weekly earnings (excluding bonuses) have fallen by 8% when pegged against the Consumer Price Index (CPI) as a measure of inflation, and by 10.2% if the Retail Price Index (RPI) was used.

The research also suggested that the level of UK productivity has declined dramatically since the start of the economic crisis, which leads to less money being available for wages.

CIPD chief economist Mark Beatson said employers, employees and policy makers needed to “come together in a combined effort to improve UK productivity”.

“We need a shared agenda to produce the long-term improvement in productivity needed to make higher pay affordable and sustainable without pushing up unemployment,” he said.

“And Government has a part to play too, with a more concerted effort needed to provide an improved supply of higher level skills and just as importantly encourage greater demand for and utilisation of these skills.

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