Companies' annual pay reviews are yielding a median 2% pay award for employees, the latest data from pay analysts at XpertHR reveals. Measured over the three months to the end of April 2015, this is the thirteenth consecutive rolling quarter in which 2% has been the going rate for pay awards.
Although 2% is low compared with before the recession (3%-3.5% norm), the real value of pay awards is determined by comparing them against inflation. So far in 2015, 90.2% of pay awards have been worth the same or more than the April RPI figure of 0.9%. However, employers surveyed by XpertHR have reported that the key factor that is currently determining the level of pay rise is their company performance/ability to pay; the lack of movement from a 2% pay award suggests that a large number of employers are yet to feel confident enough to make higher awards.
By sector, pay awards in the private sector are also worth a median 2%, while increases for public sector workers are centred on the 1% paypot stipulated by government policy.
Other key findings from XpertHR's analysis of pay awards in the three months to the end of April 2015 include the following:
- Deals converge around the median - the middle half of pay awards are worth between 1.5% and 2.4%.
- Higher deals are rare - just 4.9% of pay awards paid increases of more than 3%.
- Sectors converge - the median pay award in both the manufacturing-and-production sector, and private-sector services, sits at 2%.
- Pay freezes diminish - just a handful of all pay deals (5.7%) resulted in no increase for employees.
- Public sector continues to lag - pay awards in the public sector were worth a median 1.6% in the 12 months to the end of April 2015, compared with 2% in the private sector over the same period.
XpertHR Pay and Benefits editor Sheila Attwood said:
"Employers continue to favour pay awards in the region of 2%, and we see no evidence of this changing over the remainder of the year. While this compares favourably with the current readings on inflation, we should not forget that pay awards were worth less than RPI inflation for almost five years."