Pay awards stuck at 2%

Employers are awarding across-the-board pay increases of just 2% to their staff, according to pay analysts at XpertHR. Pay awards have now been at the same level for the best part of three years. 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.

Although the 2% whole economy median pay award compares favourably with current inflation, the research shows that for a third consecutive year employers have not increased the amount by which they enhance employees' pay.

Other key findings from XpertHR's analysis of pay awards effective in the 12 months to the end of August 2015 include the following:

• A quarter (26%) of pay awards in the public sector were worth just 1%.
• Overall, just 6.5% of settlements paid increases of more than 3%.
• As many as 39% of pay awards were lower than the same group of employees received at their previous review, with 29% higher.
• The median pay award in both the manufacturing/production sector and services sits at 2%.
• 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.

XpertHR 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.’

‘Pay trends September 2015: pay settlements stable, real growth continues’, XpertHR, September 2015. To find out more, please visit: www.xperthr.co.uk/survey-analysis/pay-trends-september-2015-pay-settlements-stable-real-growth-continues/156054/?t=131