First pay awards of 2018 show promise at 2.5%

Median pay awards have reached 2.5% for the first time in four years, according to data from XpertHR.

Based on a sample of pay awards effective from January 2018, the median award was worth half a percentage point more than the 2% median increase that remained constant through 2017.

This is also the highest median pay rise recorded for almost four years.

XpertHR found that organisations in both manufacturing and production, and private-sector-services, are being more generous in their pay awards this year.

Both sectors recorded a median 2.5% award, with the middle half of increases worth between 2% and 2.8%.
Although this sample is only a snapshot of the first deals to be concluded for 2018, the figures are a positive sign that employers are making higher pay awards than over the past year.

Based on a matched sample, almost 60% of awards paid more to the affected employees than in January 2017 (and less than 20% were given a lower award).

In the three months to the end of December 2017, meanwhile, the median pay award was 2%, with the middle half of pay awards worth between 2% and 3%.

Over the same period, almost half (47.4%) of pay awards were at exactly the same level as employees received at their previous review. Just 13.1% were lower, but a almost four in 10 were higher.

Over the 12 months to the end of December 2017, the median pay award in the private sector was 2%, compared with 1.1% in the public sector.

“It is almost four years since XpertHR’s headline measure of pay awards has stood at 2.5%, but we are now seeing some much-needed growth in pay award levels in the first deals to be concluded in 2018,” said XpertHR pay and benefits editor Sheila Attwood.

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