Employers are awarding across-the-board pay increases of just 2% to their staff, according to data released today (Friday) by pay analysts at XpertHR.
The survey of more than 1,000 settlements (XpertHR's largest sample of pay awards ever) shows that pay awards have now been at the same level for the best part of three years. And rarely is one pay increase so popular - 28% of pay awards over the past year are worth exactly 2%.
Data for the 12 months to the end of August 2015 shows that there are winners and losers among the sample. In the private sector the figure recorded is also 2%, whereas in the public sector it falls to 1.6% - and this latter figure has been boosted by a number of pay awards where a higher amount was paid to the lowest earners. A quarter (26%) of pay awards in the public sector were worth just 1%.
Although the 2% whole economy median pay award compares favourably with inflation (against both RPI inflation at 1.1% in August 2015 and CPI at nil), the research shows that for a third consecutive year employers have not increased the amount by which they enhance employees' pay.
One piece of good news from the research is that the proportion of pay settlements resulting in a freeze has fallen, and now stands at 7.6% - not far off the long-run average of around 5% of pay deals in any one year.
Other key findings from XpertHR's analysis of pay awards effective in the 12 months to the end of August 2015 include the following:
- Deals settle close to the median - the middle half of pay awards are worth between 1.5% and 2.5%.
- Few high pay deals - just 6.5% of settlements paid increases of more than 3%, and several of these were as a result of weighting towards the lowest paid.
- Lower pay awards for many - four pay awards in 10 (38.9%) were lower than the same group of employees received at their previous review, with just three in 10 (29.5%) higher.
- Sectors converge - the median pay award in both the manufacturing-and-production sector, and services, sits at 2%.
XpertHR's rolling quarterly data also shows a median 2% pay award in the three months to the end of August 2015.
XpertHR Pay and Benefits editor Sheila Attwood said:
"Our data clearly shows that employers are awarding the same across-the-board pay rises as a year ago, and the year before that. Although the economy is now growing, employers are not responding by awarding higher pay increases to employees."