Employers resist pay pressures as awards remain weak

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Employers have continued to resist the pressure of high inflation on pay, with the average basic pay award falling from 2.4% to 2% in the three months to the end of April.

This is according to the latest analysis of pay awards by XpertHR, which also found that settlements in the private sector were higher than the overall average at a median of 2.4%, but have remained unchanged since the three months to January 2011.

Addtionally, public sector workers saw their real take-home pay fall by 4.4% over the past year, as pay rose by a median of 0.8%, while retail prices index inflation increased by 5.2% in April.

Many employers have opted to freeze pay this month, with the proportion of freezes rising from 9.2% to 19.3%, despite having fallen over the previous few months.

As almost four pay awards in 10 (38%) take effect each April, it is the most important month of the pay bargaining year.

Sarah Welfare, XpertHR pay and benefits deputy editor, commented: “While private sector pay awards have recovered a little over the past year, this latest data confirms our view that we are seeing only a slow and gradual recovery in private sector pay rises in 2011, most of which continue to fall behind increases to the cost of living.

“Meanwhile, public sector workers are experiencing significant cuts in real take-home pay. The findings confirm the extent to which real, take-home pay is being eroded in both the public and private sectors.”

View the full findings of the XpertHR pay analysis here.

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