Last month, we reported that the headline award had fallen below this level for the first time since the end of 2012. Although the current findings mark a return to the 2% benchmark, the median is finely balanced, and would have been worth less than 2% with the addition of a single settlement below this level.
Much of the weakness in the pay awards over the past few months is a result of the low pay settlements in the public sector, where the pay bargaining year is kick-started with the recommendations of the independent pay review bodies. Their reports cover many key public-sector workforces with April review dates – including NHS staff across the UK who saw their pay awards restricted to 1% by Government policy. In the private sector, the median award has been worth 2% for almost two years.
However, overall only a minority of pay settlements from across the whole economy are higher than those made to the same group in the previous bargaining round - in a matched sample fewer than a quarter (23.2%) are higher than the group received last year, compared with more than four in 10 (43.2%) that are lower and one-third (33.6%) that are the same.
Based on the 270 basic pay awards effective between 1 March and 31 May 2016, XpertHR’s analysis reveals that:
- The median pay award stands at 2%, up from the revised figure of 1.8% in the previous rolling quarter.
- 2% remains the most common award, making up almost a quarter of basic settlements, with one deal in six worth 1%.
- Pay settlements in the two arms of the private sector – manufacturing and production, and private-sector services, are worth 2%, in line with the whole-economy figure.
Looking at pay awards over the year so far, companies in the utilities sector (electricity, gas and water) have awarded increases worth just 1.5% at the median, the weakest in the manufacturing-and-production sector, while the not-for-profit sector has shown the lowest increase among private-sector services groups, at just 1%.
XpertHR pay and benefits editor Sheila Attwood said:
"There is uncertainty about the direction of pay settlements, at least in the short term, but for the time being we are seeing employers in the private sector making awards in line with their prediction of 2% over the course of the year, while the public sector continues to feel the impact of the Government’s policy of restraint."