The median basic pay award in the three months to the end of March dropped slightly to 4.8%, according to the latest analysis from Brightmine, formerly XpertHR.
The company found that just over 56% of pay deals handed out over the period were worth less than the value of that paid out to the same group of employees last year.
However, thanks to slowing price rises, pay awards are now beginning to edge above the rate of inflation.
At the height of the cost-of-living crisis in October 2022, the consumer price index (CPI) stood at 11.1% in comparison to a median pay award of 5%.
Brightmine has found that this gap has now closed, with pay deals now standing at a median of 4.8%, while CPI sits at 3.8%.
Based on 142 pay settlements that came into effect between 1 January and 31 March 2024, covering 398,976 employees, the most common pay rise was 4%. Around a fifth of all awards were at this rate. Around two-thirds (63.1%) were worth between 3% and 5%.
The median merit award for the three months to the end of March was 5%, unchanged from the previous rolling quarter. For the most recent period, around a quarter (23.3%) of awards had a merit element.
Sheila Attwood, Brightmine senior content manager, data and HR insights, said: “Although there has been a noticeable drop in the level of pay awards when compared to the peak of 6% recorded last year, there are now signs of stability starting to emerge.
“Pay awards are also starting to creep above the rate of inflation. While this may well be a result of 2024 pay award budgets being agreed when inflation was higher, organisations are also looking to their compensation offering to help as they battle skills and labour shortages.”
Attwood added that the first April settlements looked promising, with a median basic award of 5% so far.
“This cements our view that pay awards will centre on the 5% mark over at least the first half of 2024,” she said.
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