This continues the stable trend seen in each rolling quarter since the three months to the end of December 2016. Although the spread of awards has widened, with the middle half of deals worth between 1% and 2.6%, there are no signs of pay award levels rising.
The headline pay award is 1.6 percentage points below the level of retail prices index (RPI) inflation, which stood at 3.6% in July 2017, and 0.6 percentage points below consumer prices index (CPI) inflation, which stood at 2.6%. Of our current sample, a quarter of basic awards are worth more than CPI inflation, while only one award provides an increase when compared with RPI inflation.
We have now moved into the quiet part of the pay bargaining calendar, as more than seven in 10 pay settlements recorded on the XpertHR pay databank are effective in the first four months of each year.
Based on a sample of 47 pay awards from across the economy effective between 1 May and 31 July 2017 (covering the pay awards for more than 755,000 employees), we find that:
- 2% is the most common pay award, given to 29.8% of employee groups;
- half of all pay awards are worth between 1.0% and 2.6%;
- a 2.6% pay award was recorded in the manufacturing and production sectors, which compares favourably with the 1.8% increase noted in the service sector; and
- more than four in 10 pay awards (45.2%) are higher than employees received a year ago, and less than one-fifth (16.7%) are lower.
XpertHR pay and benefits editor Sheila Attwood said:
“While most employers are awarding pay rises, the increases are subdued and falling behind inflation. XpertHR’s headline measure of pay awards remains centred on 2%, and is expected to remain there for the foreseeable future.”