PAY DATA
2% is floor for pay settlements
The latest pay analysis by Incomes Data Services indicates that the pattern of settlements established over the past couple of months appears to be holding.
Figures from IDSPay.co.uk show basic pay awards remaining at 2% for the three months to the end of June, as measured by median pay settlement, the same as in the three months to the end of May. Meanwhile, wage freezes continue to make up around a third of settlements.
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The IDS figures show that while the proportion of freezes is generally stable, half of all settlements are worth 2% or more, indicating that this level has emerged as something of a “floor” for pay rises. Excluding pay freezes, the median settlement level is 2.5%. So for companies not freezing pay, this is the level of actual increases being paid.
Summary of key IDS data
For the three months to the end of June 2009, based on an analysis of 235 settlements covering 2.7 million employees in total:
Median (whole economy): 2.0%
Average (whole economy): 1.7%
Interquartile range (whole economy): 0% to 3.0%
Manufacturing and production median: 1.5%
Private services median: 2.0%
Wage freezes
According to IDS, most of the wage freezes have been at smaller firms: just over half cover companies with less than 500 employees. Where companies have decided to freeze pay, some compensatory measures have been offered to employees:
For example, in lieu of a basic pay increase this year, BT has offered staff a non-consolidated payment of £400, to be paid in two instalments. The CWU trade union is currently balloting members over the offer and is recommending its acceptance.
Also at BT, and other firms where there has been no general award, eligible staff are in receipt of progression increments.
Bonus payments
Some organisations monitored by IDS are also continuing to pay bonuses. Of the 86 deals that resulted in a pay freeze in the latest three-month period, one in six paid some element of bonus to employees. For example, Unilever Home & Personal Care has brought forward £450 from the 2009/10 bonus as well as paying non-consolidated lump sums of £150 to around 400 employees in lieu of a basic pay rise for 2009.
Public sector developments
Pay settlements in the public sector are running at slightly higher levels. As IDS explains: “Many are part of long-term deals with increases agreed last year when the economy was in much better shape.”
But current pay offers in the public sector are now at much lower levels including the one for local government employees in England and Wales which is 1%, with slightly higher increases for lower-paid employees. The pay award for the fire service has just been settled at 1.25%, effective from 1 July 2009.
A final word
“With the key bargaining month of April now behind us, the pattern appears to be largely set, with freezes at some organisations but (mostly modest) rises at others. However there are still a number of companies to reach late deals for 2009. And pay reviews are still due in certain key sectors, such as the civil service, retail, road transport and the motor industry.” - Ken Mulkearn, Editor of IDS Pay Report.
Want to know more?
IDSPay.co.uk is an online repository of all remuneration data collected by IDS, including data on pay levels, pay settlements and executive compensation. For further information, tel: 0845 310 5517 or email: ids.sales.support@thomson.com.
Incomes Data Services is the “leading UK information and research service on employment issues, providing a range of publications for employers, trade unions, government departments and other agencies”. For more information visit www.incomesdata.co.uk.