Private sector pay awards centred on 3% - IDSPay.co.uk

PAY DATA

Private sector pay awards centred on 3% - IDSPay.co.uk

The picture on pay continues to be a tale of two sectors, with the median award at private businesses standing at 3% in the second quarter of 2012, while the comparable figures for both public and not-for-profit organisations are zero, according to new data from IDSPay.co.uk.

This latest analysis by IDSPay.co.uk largely reflect pay decisions taken for the April bargaining round, which always dominates the pay picture in the second quarter of the year.

In the three months to the end of June:

• Pay awards are as yet showing few signs of dropping away despite RPI inflation beginning to fall. IDS says: “This might be because the shrinking gap between pay rises and the cost of living is welcome for both employees and employers, having been so wide for so long.”
• Taken across the economy as a whole, the median pay award was 2.5%.
• Just over half of private sector settlements recorded were at 3% and above.
• More than one-in-ten private sector employers awarded increases at 4% and above.

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Public sector pay freezes

In the public sector, wage freezes remain the norm. Around two-thirds of all pay reviews resulted in a freeze, including all of the largest employee groups in the health service and local government. The exceptions are in a few councils in the south east of England not covered by national bargaining and at a few public bodies.

More than half of pay reviews recorded in the not-for-profit sector - where organisations’ funding is often heavily reliant on public spending - have also resulted in a freeze.

Only a handful of private sector employers froze pay in the second quarter of 2012.

Summary of key settlement data

For the three months to the end of June 2012, based on 149 settlements covering 3.8 million employees in total, the key IDSPay.co.uk statistics are these:

• Whole economy median: 2.5%
• Whole economy average: 2.3%
• Whole economy inter-quartile range: 1.8% to 3%
• Private sector median: 3.0%
• Manufacturing and production median: 3.0%
• Private services median: 2.5%
• Public sector median: 0%

A final word

“Median pay settlement levels across the economy have been significantly below the RPI inflation rate since November 2009. The fact that the private sector median has now nudged ahead of inflation will provide a little welcome respite for some hard-pressed employees, but the coming months will tell whether this represents a continuing trend or a temporary blip.” - Alastair Hatchett, Head of Pay and HR Services, IDS. 

Want to know more?

IDSPay.co.uk is an online source of all the remuneration data collected by IDS, on pay settlements, pay levels and executive compensation. Visit www.IDSPay.co.uk to see a demonstration or to sign up for a free trial.

IDS Pay Report, published fortnightly, is the UK's “leading source of research and analysis on pay and benefits across the economy”.

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 details visit www.incomesdata.co.uk.