Finance sector pay awards in the first four months of 2003 were focused at around 3 per cent, down slightly on the 3.3 per cent level recorded a year earlier, according to research published by IRS Employment Review.
The fall in settlement levels reflects difficult trading conditions stemming from the global economic slowdown and stock market turmoil of the past 12 months.
Other findings include:
- Half of all merit awards were pitched between 2.6 per cent and 3.5 per cent, compared to a range of 3 per cent to 3.75 per cent in 2002.
- Just one in five awards were higher than in 2002, almost a third were lower, while less than one in 10 were the same.
- Only 13 of the 61 awards surveyed were basic settlements with no merit increase.
- The 32 banking sector settlements recorded by IRS ranged from 1.5 per cent to 5 per cent, with a median increase of 3 per cent - unchanged from 2002. However, their real value has declined from a year ago, when inflation was much lower.
- The 29 insurance sector awards monitored ranged from 1.5 per cent to 4.7 per cent, with a median of 3 per cent. Last year, the median deal was 3.4 per cent.
IRS Pay and Benefits Bulletin editor, David Carr, said: “Although there has been little cause for celebration for finance firms in recent months, there are some tentative signs of a recovery in stock markets and the wider economy. Whether this shores up investor confidence in the short term remains to be seen and further job losses cannot be ruled out.
"In such an environment, the prospect of an upturn in awards is minimal and finance sector settlements are unlikely to rise much above the 3 per cent mark in the near future.”