PAY DATA
Wage freezes fall to lowest level since January 2009
Pay awards for the three months to the end of April 2010 picked up to 2%, from 1.9% in the previous month, as the proportion of wage freezes continued to decline, according to the latest data on settlement trends from IDSPay.co.uk.
Wage freezes now account for less than a fifth of awards. This is the lowest level since January 2009, when wage freezes first emerged as a key trend in pay setting during the economic downturn.
The median settlement level in the private services sector has risen significantly, up from 1.3% in the three months to March to 2% in the latest analysis.
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Contrast with public sector
Meanwhile, the median pay settlement in the public sector, at 1%, is half that for the economy as a whole, with more than a third of public sector pay awards with effective dates in April resulting in freezes. Public sector freezes covering large numbers of employees include the senior salary review body groups and consultants, GPs and dentists covered by the NHS Doctors’ and Dentists’ Review Body.
Where increases have been awarded in the public sector, these have tended to be around the 1% mark, including the award for prison service staff in England and Wales and in Northern Ireland. As IDS points out: “While a small number of public-sector awards have been at higher levels, these have formed part of previously-agreed long-term deals, and increases as part of new deals are likely to be lower as pay restraint in the public sector intensifies.”
Summary of key settlement data
For the three months to the end of April 2010, based on 97 settlements covering 2.1 million employees in total, the key statistics are these:
Whole economy median: 2.0%
Whole economy average: 1.9%
Whole economy inter-quartile range: 1.0% to 2.5%
Manufacturing and production median: 2%
Private services median: 2%
A final word
“Our latest figures present strong evidence that pay freezes - one of the key features of the recession - are now fading, in the private sector at least, as the economy stabilises. Overall, the higher RPI inflation rate of 5.3% is having only a moderate effect, but that effect could strengthen in the second half of 2010, depending on the economic outlook. However, the picture in the public sector is very different, with the number of freezes rising.” - 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.