Dip in Pay Awards Confirmed

30th June 2014

Pay deals across the whole economy have resulted in a median 2% increase in the three months to the end of May 2014, according to the latest analysis from pay specialists XpertHR. This marks a fall from the 2.5% median increase recorded in the first three months of the year.

The whole economy figures for April are heavily influenced by a couple of key sectors that typically set pay awards around this time of year. Further analysis reveals that:

Pay settlements in the public sector are centred around 1%, although 14% of groups in our current analysis have had pay frozen and several deals are weighted towards the lowest paid.

Private-sector pay awards are worth 2% at the median, the same as the whole economy figure.

Settlements in the not-for-profit sector make up almost one in five of the sample of basic pay awards this quarter. They are set at a median 2%.

When not-for-profit deals are excluded from the private sector, the median private-sector pay settlement rises to 2.5%.
Pay awards in the manufacturing-and-production sector, at a median 2.5%, continue to sit above those in the services sector (2%).

Over the economy as a whole, four in 10 pay awards were worth the same or more than the 2.4% May 2014 retail prices index (RPI) inflation. However, while RPI is forecast to rise slightly towards the end of the year, XpertHR's latest pay forecast survey found that private-sector employers expected to award a median 2.5% increase during 2014. Another year of below-inflation pay awards is therefore on the cards for the majority of employees.

XpertHR Pay and Benefits editor Sheila Attwood said:"Employers are continuing to take a cautious approach to pay reviews, with settlements of 2% in the private sector at the same level as seen over the latter part of 2013. Despite some positive news on the economy, pay award levels are expected to remain subdued for the time being."

Expert HR web site - http://www.xperthr.co.uk/topics/pay-and-benefits/