Employers may finally be giving pay awards worth more than inflation, but the level of increases remains low, according to the latest data from pay analysts at XpertHR.
In the three months to the end of January 2015, the median pay award for UK employees was just 2%, finds XpertHR. In the year to January 2015, inflation on the retail prices index (RPI) measure stood at 1.1%, 0.9 percentage points less than the value of pay awards. On the Government's preferred inflation measure, CPI, pay awards are currently sitting 1.7 percentage points above the increase in prices.
Other key findings from XpertHR's latest analysis of pay awards include:
- The middle half of pay awards effective in the three months to 31 January 2015 are worth between 1.5% and 3%.
- The most common pay award was a 2% increase.
- Within the private sector, manufacturing-and-production companies' pay awards have fallen, worth a median 2.1% in the latest analysis (compared with 2.7% in the final quarter of 2014). Private-sector services companies continue to make pay awards typically worth 2%.
- Pay freezes account for around 10% of all pay awards.
- Pay awards in the public sector were worth a median 1.5% in the 12 months to the end of January 2015, compared with 2% in the private sector over the same period.
XpertHR Pay and Benefits editor Sheila Attwood said:
"Employers have told us that recruitment and retention issues are putting pressure on paybill budgets, but this is currently limited to specific job roles and has not lead to an across-the-board need to raise pay levels. Employees, meanwhile, are most likely to be seeking higher salaries this year, rather than increases in other areas of reward such as benefits or bonus payments."