Pay awards remain stagnant at 2%

Although pay freezes are becoming less frequent, employers are still only awarding modest pay increases, according to the latest analysis from XpertHR.

Covering the pay awards of almost 2.5 million employees, XpertHR research released today reveals that the median pay award in the three months to the end of June 2015 was worth just 2%, and it has been stuck at this level since April 2014.

Commenting on the data, TUC general secretary Frances O’Grady said: “The Chancellor’s economic plan hasn’t delivered the gains that will get us back to better pay increases.

“We need a stronger recovery, with higher productivity and more decent jobs. But with signs of the economy slowing, major cuts to public services could further weaken growth and reduce the chance of pay rises improving.”

At the beginning of the year, employers surveyed by XpertHR predicted that this would be the case, so it seems that this figure is not surprising to many.

Although pay freezes only account for 6.9% of all pay awards during this period, half are worth between 1.5% and 2.5%, with just one award in six worth 3% or more.

The public sector seems to be faring worst, with pay awards in the year to June 2015 standing at 1.5%. Manufacturing and production and private-sector services are seeing slightly higher increases of 2%.

XpertHR pay and benefits editor Sheila Attwood said: “The going rate for pay awards across the economy is firmly stuck at 2%. However, with the Chancellor announcing that pay awards in the public sector will be restricted to 1% for a further four years from 2016-17, the divide between the value of increases in the public and private sectors is likely to prevail for many years to come.”

With the the national minimum wage due to increase by 3.1% from October, and the new living wage set to be introduced from April 2016, it remains to be seen if this will positively affect pay awards.

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