The median basic pay settlement continues to stand at 3% in the three months to August 2004, unchanged from the quarter to July. One-third of all pay settlements paid a 3% increase. This marks another milestone as the IRS Pay Databank measure of pay awards has now stood at this level for the past year and a half, according to the monthly analysis from pay analysts IRS (Industrial Relations Services), part of LexisNexis.
Other key findings include:
Inflation outstripping pay awards Just over a quarter (28%) of basic pay settlements in the latest IRS analysis made an award higher than the current rate of headline inflation (3.2% in August).
Pay awards condensed. The measure of the spread of pay awards, the interquartile range, has contracted this month. While the upper quartile remains at 3.5%, the lower quartile has risen 0.3 percentage points to 2.8% during August.
Private sector pay growth above public sector. Public sector pay deals have outstripped private sector deals for every month since April 2001. However, according to IRS Pay Datbankís latest data, basic pay awards in the 12 months to August 2004 are higher in the private than the public sector. While deals in private companies continue to stand at a median of 3%, the equivalent public sector figure has dipped to 2.9%. This can be attributed to several awards made in August 2003 falling out of our annual analysis, while few of these organisations have settled their most recent pay review.
Manufacturing and services sector in tandem. Basic pay awards are now also running at 3% in both the manufacturing and service sectors. This represents no change in the service sector, but a 0.2 percentage point increase on the revised July figure in the manufacturing industry.
IRS Pay and Benefits editor, Sheila Attwood said:
ìAlthough we are now in the quieter months of the bargaining year, pay setters will be closely monitoring pay settlements patterns during the next few months before the busy January negotiating round. As employee representatives submit pay claims several months ahead of the review date - hoping to settle their pay award in advance of the effective date - the current bargaining climate is an important longer-term indicator.
ìIf headline inflation continues its upward path, there is a real possibility that pay awards will breach the 3% mark for the first time since June 2001. Most notably, any inflation-linked deals due to take effect over the coming months will almost certainly be based on an inflation rate of 3% or more. Any inflation-plus deals could help to establish a higher benchmark for pay negotiators in advance of the crucial bargaining period between January and April 2005.î
UK pay awards steady over summer
The median basic pay settlement continues to stand at 3% in the three months to August 2004
