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HR News Update – Pay awards remain low

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Pay settlements across the economy remain low, pitched at just 2 percent in the three months to the end of June 2014, according to pay specialists XpertHR. Pay awards have been at this level since the three months to the end of April; in the first quarter of the year pay awards stood at 2.5 percent at the midpoint.

The figures for the latest rolling quarter include the important month of April – around 40 percent of pay awards during the year take effect in this month alone. April is particularly popular for pay awards in the public sector, as well as not-for-profit organisations. Pay awards in these two sectors remain stubbornly low – the public sector as a result of Government pay policy to limit awards to an average of 1 percent, and the not-for-profit sector from the squeeze on funding.

Across the private sector, findings on pay awards in the three months to the end of June 2014 include the following: Pay freezes were in place in 13 percent of organisations. The most common pay award was 2 percent (made at 27.1 percent of organisations). More than a quarter (26.7 percent) of pay awards were worth the same or more than the 2.6 percent June 2014 RPI inflation figure. Manufacturing-and-production firms recorded a median 2.5 percent increase, compared with 2 percent in private-sector services companies.

XpertHR Pay and Benefits editor Sheila Attwood said:”Pay settlement levels remain subdued, with little sign from employers that there will be an upturn over the remainder of the year. Although some employees will receive a 3 percent increase as a result of the national minimum wage increase in October, for the majority of employees pay awards around the 2 percent to 2.5 percent mark will remain the norm.”

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