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Latest NewsPublic sectorPay settlements

Pay awards fall to 2.3% in three months to July

by Ashleigh Webber 23 Aug 2018
by Ashleigh Webber 23 Aug 2018

Pay awards in the three months to July dropped slightly to 2.3%, but still remained higher than the amount recorded a year ago (2%).

XpertHR analysis of 51 pay deals made between 1 May and 31 July showed that the median value of settlements fell for the first time in almost two years, having either remained steady or risen every month since September 2016.

Pay awards

Forecasts for pay awards in 2018

Settlements had remained at an average of 2.5% for the first six months of this year, with 2% being the most common award.

XpertHR said the drop was in line with the Office for National Statistics’ latest average weekly earnings data, which showed that earnings growth fell to 2.4% in June. Inflation has also fallen, with the July 2018 Retail Price Index (RPI) figure dropping to 3.2% – the lowest since March 2017.

However, 65.3% of settlements were higher than the award the same group of employees received at their previous pay review. A quarter of pay awards were worth 3% or more, while a quarter were 1.8%.

XpertHR pay and benefits editor Sheila Attwood said: “Although we have recorded a small dip in the level of pay awards this month, they are still running higher than a year ago and the majority of employers are rewarding employees with a greater increase than at their previous pay review.”

Pay awards in the manufacturing sector were 2.9% on average in the three-month period, compared with 2% in the private sector.

The median pay settlement in the private sector was 2.5% in the 12 months to the end of July 2018, compared with 2% in the public sector.

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Public sector pay is likely increase further, with the government announcing pay rises of between 2% and 3.5% for more than a million workers.

XpertHR said the number of pay deals is likely to reduce towards the end of the year, as more than seven in 10 pay settlements are effective in the first four months of each year.

Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

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