LONDON, 23 October 2012 – Aon Hewitt, the human resource solutions business of Aon plc (NYSE: AON), has published the latest results of its 2012/2013 Global Salary Planning Report. The report reveals that UK employers are increasingly responding to tough economic conditions by doing their best to avoid salary freezes and placing employee retention high on their list of priorities.  During 2012, private sector salary budgets in the UK increased at a rate of 3.2%, the same rate as in 2011. However, over the same period, inflation remained around 2.9%, down from 4.5% in 2011, resulting in a rise in spending power for employees.

Andrew Macleod, leader of Aon Hewitt’s pay research practice in Europe, Middle East and Africa said:

“At a time when companies are understandably looking to reduce their operational costs, it is good to note that we are not seeing austerity measures such as pay freezes that directly hit the income of employees. By contrast, we have seen a steady commitment by private sector employers to rewarding and retaining their staff throughout the ongoing economic turmoil.  We expect that trend to continue.”

"Some of the economic numbers are also encouraging. With salaries outstripping inflation in 2012, employees will welcome the news that this equates in real terms to higher take home pay.  By contrast, in 2011, the higher rates of inflation effectively eroded any increase in the purchasing power of salaries."

The survey’s outlook for next year provides further cause for optimism with salary budgets projected to continue at a rate of 3.2%, ahead of the expected inflation rate of 2.8% for 2013.

This year's survey also highlights that employees in the UK's private sector are faring better than in the public sector where salary budgets increased by a lower rate of just 1.5%.  This ongoing squeeze on public sector salary increases, which remains below the rate of inflation, highlights the continuing effect of the economic challenges the UK faces.

In the UK, the survey was responded to by 447 UK based organisations, representing a cross-section of industry sectors. Energy companies experienced the highest increases this year averaging 4.9%, while at the lower end outside of the public sector, charitable organisations and property companies both averaged overall increases of 2.6%.

Media Contact: 

Colin Mayes                                                       Giles Abbott 
 Aon Hewitt                                                        Capital MSL
 01372 733689                                                 020 7307 5340
 colin.mayes@aonhewitt.com                       giles.abbott@capitalmsl.com

Notes to editors

About the 2012/2013 Global Salary Planning Report
Data for the 2012/2013 Global Salary Planning Report, collected in the summer of 2012, focuses on overall changes in employee compensation for the calendar year 2012, and on current projections for 2013. The survey spans over 100 markets with 14,165 country submissions. Participants include service, manufacturing, and multi-industry organisations.
About Aon Hewitt
Aon Hewitt is the global leader in human resource solutions.  The company partners with organisations to solve their most complex benefits, talent and related financial challenges, and improve business performance.  Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.  With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees.  For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.