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Average pay awards still lie below inflation at 2%, according to data from HR and reward consultancy Paydata.
Its Spring 2021 reward management report for the UK found that while 54% of companies have managed to avoid making redundancies, they remained cautious about pay awards.
This is despite almost a fifth (22%) of employers experiencing retention difficulties, according to Paydata, and this proportion is expected to rise to 31% in the next six months.
While there was a temporary uplift in pay awards at this point last year to 3%, this was mainly because 56% of respondents to its 2020 survey had already completed pay reviews prior to the first lockdown.
Paydata found that 11% of respondents were operating a pay freeze, although this was a 24% drop in the number of organisations freezing pay from its autumn survey.
Almost three in 10 offered a pay increase across the board, while 26% implemented a combination of across- the-board pay rises and individual increases.
Roughly the same proportion of organisations operated a bonus scheme, steady at 75-76%. Half said they would keep the number of people receiving bonuses the same this year, while a third said the size of bonuses would stay the same.
While not all organisations were able to offer pay increases, 89% have adopted strategies to boost employee wellbeing, and four-fifths used employee surveys and consultations to listen to employees’ concerns and suggestions.
Optimism in business recovery is higher than it was in autumn 2020, according to Paydata. Forty-seven percent of respondents said they were optimistic about pay increases, compared with just 18% in autumn.
Although enforcements around gender pay gap reporting were postponed because of the pandemic in 2020, 61% measured the gap