The median basic pay award in the three months to November 2023 was 6%, for the eighth month in a row, according to XpertHR.
Only three rolling quarters in 2023 saw the median pay settlement dip below 6%, its analysis showed. All other periods remained consistent at 6%, a level not sustained for more than 30 years.
The jump from a median of 4% in 2022 reflected the high levels of inflation in the UK this year, explained Sheila Attwood, senior content manager, data and HR insights.
This was “a commitment from employers to help their employees with [the high cost of living] as much as possible”, she said.
“Inflation is now falling, and we expect the level of pay awards to follow suit. However, employers have indicated that there may only be a small drop-off – our prediction for the going rate of pay awards in 2024 sits at 5%.
“Organisations are still keeping a close eye on inflation but also the loosening of the labour market and the health of the economy – deteriorating conditions will likely drive pay awards down in the busy January and April months.”
The interquartile range remained unchanged for the third consecutive month, according to XpertHR, spanning two percentage points.
Based on 26 settlements representing just under half a million employees between 1 September and 30 November, the lower quartile remained high at 5%, while the upper quartile stood at 7%.
Public sector pay awards continued to surpass those in the private sector. In the 12 months to the end of November 2023, public sector pay awards stood 0.5 percentage points above the private sector and the median across the whole economy.
Over the course of 2023, XpertHR has analysed more than 1,000 pay settlements, and most were higher than in 2022.
By the end of November 2023, in a matched sample, 76.1% of 2023 pay settlements had higher values compared to the prior settlements for employees.
At November 2022 last year, the median pay award across the entire economy for the previous 12 months was 4%, so has increased by two percentage points.
November is traditionally a quieter time of year for pay deals, XpertHR pointed out.
A significant portion of deals in 2023 were clustered around the beginning of the year.
Nearly half (47.7%) of all 2023 deals came into effect in April, with one-third (32.5%) becoming effective in January. Consequently, by the end of April, the majority (87.3%) of all 2023 pay deals had been implemented.
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