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Latest NewsPay & benefitsPay settlements

Average pay awards for 2017-18 pay bargaining revealed

by Ashleigh Webber 27 Sep 2018
by Ashleigh Webber 27 Sep 2018

The pay bargaining year has ended with pay awards averaging at 2.5%, despite a slight dip in the three months to July.

According to XpertHR, the median pay award returned to 2.5% for the three months to the end of August 2018.

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Yet, despite the increase, pay deals still trailed behind inflation and have done so for two years – the retail prices index increased to 3.5% in August.

The majority of employers had finished making pay awards for 2018 and were turning their attention to reviewing pay for 2019.

XpertHR’s analysis of 91 pay settlements effective between 1 June and 31 August 2018 discovered that 22% of employee groups received a 2% pay increase – the most common pay award.

Six in 10 pay deals (57.3%) were higher than what employees received a year ago, while only 20.6% were lower. Half of the pay deals struck were worth between 2% and 3%.

In the manufacturing and production sector, pay deals were worth 2.5% on average. In the services sector, employees received an average increase of 2%.

A sample of pay awards made in the 12 months to the end of August were also looked at. It found:

  • The median pay settlement was 2.5%, with half of all deals worth between 2% and 3% (based on 1,003 deals). This follows seven years where they hovered around the 2% mark;
  • Organisations with performance-related pay saw a 2.6% increase to their pay bill, on average (based on 289 pay deals);
  • The average value of pay awards in the private sector was 2.5%, compared with 2% in the public sector; and
  • Manufacturing and production firms awarded pay rises ahead of those in private sector services companies (2.6% versus 2.3%).

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In July the government announced that more than one million public sector workers – including teachers, the armed forces and doctors – would receive pay increases of between 2% and 3.5%).

XpertHR pay and benefits editor Sheila Attwood said: “As the key pay bargaining months of the year are now behind us, we can confirm that 2.5% is the headline pay award for the 2017/18 pay bargaining year. This marks a half percentage point uplift on the same period a year ago.”

Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

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