Continued caution as pay awards linger around 2% mark

Pay increases remain resolutely at 2% despite economic growth and rising inflation, XpertHR analysis has revealed.

It found that median pay awards recorded in the three months to the end of January 2017 were 2%, a return to the benchmark award recorded for most of the past year.

One third of deals examined by XpertHR were set at exactly 2%, while half of all pay awards were within 0.8 percentage points of this figure – between 1.5% and 2.3%.

Only a small proportion of employees are getting a higher pay rise, with less than a quarter of deals (22.5%) showing a higher increase than at the organisation’s previous pay review.

Just under a third (31.8%) remained at the same level, while 45.7% were lower than a year ago.

As recorded for much of last year, the median 2% in the private sector tended to be consistently ahead of the 1% awards recorded among public sector organisations.

XpertHR pay and benefits editor Sheila Attwood said: “The latest data demonstrates the caution that employers are exercising when it comes to pay awards for their employees.

“Despite steady economic growth and rising inflation, there are no signs that pay award levels will increase greatly this year.”

XpertHR’s sample comprised 167 pay awards, covering the latest increase for almost 300,000 employees. January is the second most common month for pay awards to take effect, after April.