Has Christmas marked the end of UK pay award stagnation?

The IRS measure of pay awards remained stable at the end of 2004, but indicators point to slightly higher wage settlements in the early part of 2005, according to the monthly analysis from pay analysts IRS (Industrial Relations Services), part of LexisNexis Butterworths.

Provisional statistics from the IRS pay databank show that the headline measure of pay awards across the whole economy ñ the midpoint or median of basic pay deals recorded ñ stood at 3% for the three months to November 2004. Settlement levels have therefore remained unchanged for 20 successive rolling quarters.

Other key findings:

Public sector awards match private sector at 3%. The latest analysis shows that the median public sector pay award in the 12 months to November has nudged up from the 2.9% reported by IRS in October to 3%, the same as the median for the private sector.

Interquartile range widens slightly. The upper quartile (the point at or above which 25% of all deals lie) rose by 0.3 percentage points from 3.2% to 3.5% in November.

Manufacturing and service sector awards level. Pay deals within the manufacturing and services sectors both remained steady at 3% in the three months to November 2004.

Merit deals at 3.75%. The median budget for performance-based awards stands at 3.75.

IRS Pay and Benefits editor, Sheila Attwood said:

ìWith the majority of employers still using the RPI measure of inflation to benchmark pay awards, some rise in wage settlements in the first half of 2005 remains likely. Pay settlements are now running 0.4 percentage points behind inflation and therefore not delivering real increases in pay. The festive season really could mark the end of the current run of pay stagnation.î