Pay awards stuck firm at 2% during 2017, according to XpertHR

Employers consistently offered median pay awards of 2% during 2017, according to XpertHR’s analysis.

This 2% median increase has been a feature of pay awards for around the past five years, and was recorded once more in the three months to the end of November 2017.

2018 is unlikely to bring any change to this trend, according to XpertHR. Its forecast suggests that private sector employers will continue to award pay rises at a 2% median through 2018.

It also predicts that half of all pay awards next year will be worth between 1.8% and 3%.

That said, 2% is by far the most common pay award expected, accounting for 32.4% of predictions.

Employers may, however, feel pressure from competitors to offer higher pay rates during 2018. At the same time, pension costs are likely to impact negatively on wage budgets, said XpertHR.

In the three months to the end of November 2017, XpertHR found:

• The median pay award across the whole economy is 2%, with the middle half of pay awards (the interquartile range) worth between 1% and 2.5%.
• While only a tenth (11.8%) of pay awards were lower than the award received by the same group of employees last year, the majority (61.8%) were the same.
• Just over a quarter (26.5%) of awards were higher than the employee’s previous increase.
• Within the private sector, the 2% figure is recorded for pay awards in both manufacturing-and-production organisations and in private-sector services firms.

Over the 12 months to the end of November 2017, the median pay award in the private sector is 2%, compared with 1% in the public sector.

XpertHR pay and benefits editor Sheila Attwood said: “Employers have kept a lid on their pay settlements for the past year, and all indications are that this will continue in 2018 too.

“Employees who are in skills shortages areas might be able to secure higher increases, but for the majority employers are looking to stick to the 2% figure.”