PAY DATA
Seven of every eight pay deals at 2% or higher
The vast majority of pay deals are being awarded at or above 2%, according to the latest data from IDSPay.co.uk. Seven out of every eight pay settlements recorded between December 2010 and February 2011 were at or above 2%, while two-fifths of deals were at 3% and above.
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Key findings from IDS research
The median settlement for the whole economy is 2.5% in the latest IDS analysis, covering the three months to the end of February 2011, unchanged from the revised figure for the three months to January.
An early look at April deals suggests that pay increases may be picking up further as high inflation continues to have an impact on real wages. Most of the April deals recorded thus far by IDS have set pay increases at 3% or higher.
RPI inflation, which is typically used as a reference for pay awards, has now risen to 5.5% in the year to February. City forecasts suggest that RPI inflation is likely to remain around 5% until the end of 2011.
Three-quarters of firms awarded higher increases this year than last, as shown by a matched sample analysis.
Although a few firms continue to freeze pay, this trend is falling in the private sector, with less than one in ten firms imposing a freeze in the latest analysis.
The private services sector has seen higher pay awards than other sectors over the three months to the end of February, with a median settlement level of 2.9%, compared with 2.5% in manufacturing.
Summary of key settlement data
For the three months to the end of February 2011, based on 73 settlements covering 290,000 employees in total, the key IDS statistics are these:
Whole economy median: 2.5%
Whole economy average: 2.6%
Whole economy inter-quartile range: 2.0% to 3.0%
Manufacturing and production median: 2.5%
Private services median: 2.9%
A final word
“The figure for the median pay rise masks a range of outcomes. While some firms are still paying awards at low levels, higher inflation is exerting upward pressure on pay. And while employees worry about the gap between their pay increases and the rising cost-of-living, employers have to consider the level of pay award necessary to recruit, retain and motivate staff given factors including inflation and other concerns such as affordability and profits.” - Ken Mulkearn, editor of IDS Pay Report.
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.
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 or call 0845 077 2911.