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
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%.
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.
