In the current climate of economic contraction and job insecurity, hardly anyone will expect their wages to rise – apart from maybe hospital staff. The annual compensation survey by UBS serves as confirmation for this somber outlook, but also shows that bankers will do relatively well.

It is well worth noting that the survey among 325 companies and branch organizations was conducted from September 14 through October 7, before the recent and massive surge in infections with Covid-19. The overall picture may well have darkened since UBS conducted its annual compensation survey.

But even so, the outlook is bleak enough. Only a fifth of the companies surveyed expects a rebound next year, which will impact employment and the outlook for the jobless rate. Four-fifths expect a higher rate of unemployment, and UBS economists foresee an increase from a current 3.2 percent to 3.9 percent.

Most Employees Won't Get Any Top-Up

Lower revenues, a drop in margins and higher unemployment combine to deliver what essentially translates into a pay freeze. On average, workers will get 0.3 percent higher salaries, which, after the deduction of a 0.2 percent inflation rate, means that most staff won't receive an increase next year.

More than half of industries expect a freeze in 2021, which in essence means that their staff will see their net pay fall slightly. The industries that are most exposed to the swings of the economy, as well as those worst hit by the pandemic (tourism, catering, culture, sport, education) all, expect no increases in pay.

Bankers Due for Pay Rise

Four industries are likely to do significantly better than the average. Bankers as well as insurance staff are in for an increase of 0.8 percent in 2021 (after 1.0 percent in 2020). The expectation reported by the companies corresponds with the observation that the industry hasn't fared too badly during the pandemic (as shown by the recently published quarterly figures of UBS).

Other industries with bigger increases are the energy sector, IT and telecommunications, as well as the public sector – they all will get between 0.8 percent and 1 percent more. Slightly less are expected for the drug industry, construction, and planning as well as the health-care industry (plus 0.5 percent).