PAY DATA
Settlement levels remain stable
A detailed look at the key January wage round by Incomes Data Services indicates that settlement levels in the private sector remain stable. New pay deals recorded so far for 2010 have produced a range of outcomes and while a third have frozen salaries, a similar proportion are for increases between 2% and 2.99%.
Pay increases centred on 1% have been monitored at food and drink manufacturers and in the retail sector, while higher increases of 2% cent have been recorded at aerospace and defence companies, and in the finance sector. Overall, the median pay settlement level in manufacturing is 2% – just ahead of the figure for the whole economy.
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Summary of key settlement data
For the three months to the end of January 2010, based on 74 settlements covering 233,602 employees in total, the key statistics are as follows:
Whole economy median: 1.9%
Whole economy average: 1.6%
Whole economy interquartile range: 0% to 2.5%
Manufacturing and production median: 2.0%
Private services sector median: 1.4%
Impact of inflation
Overall, organisations have paid lower increases so far in 2010 than they did at the same time a year ago. For example, the median pay settlement level recorded by IDS this time last year was much higher, at 3.5%, compared with 1.9% in the three months to January 2010.
IDS says: “Inflation was a key factor here and as companies prepared for the January 2009 pay round they were doing so against a backdrop of relatively higher inflation. In contrast, preparations for pay reviews effective in the early part of 2010 were taking place against a different backdrop from a year ago, when organisations were feeling the effects of the recession more sharply and inflation rates were at historically low levels.”
Higher rates of inflation have now begun to emerge and are likely to exert upward pressure on pay as employers prepare for the key bargaining round of April.
A final word
“Our analysis of basic pay settlements shows broadly stable, though modest, growth. If the economy recovers we would expect earnings to rise, even if some pay freezes continue. Inflation, which has risen sharply to stand at 3.7% in the year to January 2010 on the all-items measure, will produce another upward pressure on earnings, through its influence on pay setting.” - Ken Mulkearn, Editor of IDS Pay Report.
Want to know more?
IDSPay.co.uk is a new online source of all the remuneration data collected by IDS, on pay settlements, pay levels and executive compensation. Visit www.IDSPay.co.uk.
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.