Economic pressures not translating to higher pay rises

Wage pressures in the UK economy are not translating into higher pay rises, according to research released today by XpertHR.

Two years of little or no pay rises, high inflation and a more optimistic business outlook are not equating to better pay deals. The median basic pay award in the first quarter of 2011 is 2.3%. Half of all pay awards are worth between 2% and 3%, while outside this range pay awards are fairly evenly split – 14% are worth less than 2%, while 14.5% are worth more than 3%.

“Employers may well be feeling under pressure to award higher pay increases. But, at the end of the day, the uncertain economic situation means that they are not reacting to this pressure, and continue to award only modest pay rises,” explains XpertHR pay and benefits editor Sheila Attwood.

“It is likely that employees will continue to exert pressure on employers for a decent pay rise, but our research suggests that pay rises will remain well below 3% for the remainder of 2011.”

XpertHR’s pay forecast survey, which questioned 315 employers on their intentions for the coming year, reveals that the median forecast pay increase is just 2%.

An early look at pay awards for the three months to April 2011, the busiest month in the pay-setting calendar, reveals that pay awards have actually fallen, to a median 2% basic increase. The proportion of pay freezes has also increased in the provisional figures for April, from 9.2% of pay awards in March, to 24.7% in April.

XpertHR pay specialists, formerly IRS, offer detailed statistics and analysis of recent pay settlements across the UK. XpertHR collects details of pay settlements for around 1,400 employee groups each year. Its database contains more than 28,000 settlements.

Read Sheila Attwood’s blog post about the findings on Pay Intelligence.

Subscribers can read the full XpertHR April 2011 pay trends report here.

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