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Latest NewsInflationPay settlements

Pay awards edge above inflation in wages boost

by Jo Faragher 25 Apr 2019
by Jo Faragher 25 Apr 2019

Pay awards have edged just above inflation, with the median basic pay award in the three months to March at 2.5%, according to XpertHR.

This stands just ahead of retail prices index (RPI) inflation, which stood at 2.4% in March as price rises slowed.

Pay awards

Forecast for pay awards in 2019

However, the current boost to pay awards could be short-lived, as many forecasters predict that RPI will increase in coming months.

This is the third consecutive rolling quarter that the median pay award has been 2.5%, and XpertHR predicts that this will remain stable for some months. There was a brief dip in late 2018 when median pay awards fell back to 2%, but this has since recovered.

According to XpertHR’s analysis of 216 pay awards, the middle range of pay awards is tight – standing at between 2.1% in the lower quartile and 3% in the upper.

Just over one third are higher than they were the previous year (37.7%), while 33.7% are lower and 28.6% are the same.

One organisation in 15 implemented a pay freeze, and one in 20% offered a pay rise of more than 4%. Around 22% of awards were exactly 2.5%.

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Pay and benefits editor Sheila Atwood said that more than 40% of deals take effect during April, making this a busy time of year for pay setting.

“Analysis of the first April 2019 pay deals to be awarded to employees confirms our view that 2.5% will be the benchmark pay award in 2019,” she said.

Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. Jo is also the author of 'Good Work, Great Technology', published in 2022 by Clink Street Publishing, charting the relationship between effective workplace technology and productive and happy employees. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

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