The average UK pay deal remained at 4% in the three months to May 2022, still at its highest level since 1992 but far below inflation.
The latest data from XpertHR showed that the median pay settlement in March-May 2022 far exceeded the level recorded a year ago (2%) and in the first quarter of this year (3.2%), as employers increased pay to help offset the rising cost of living.
The middle half of pay deals was worth between 3% and 5.8%, which highlighted the length some employers were going to to address retention challenges and maintain an attractive compensation package.
However, with the consumer prices index (CPI) measure of inflation reaching 9% in April, up from 7% in March, employers still have a long way to go for wages to match the rising cost of living. The Office for National Statistics publishes May’s inflation figures, widely expected to be even higher, tomorrow (22 June).
Rolls-Royce has become the latest employer to pay a one-off bonus to help offset surging prices. More than 14,000 UK staff are set receive a £2,000 boost – 3,000 will receive it in August and the remaining 11,000 unionised workers will receive it once their union approves the offer.
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Unionised staff are also set to receive a 4% increase in pay, backdated to March.
A Rolls Royce spokesperson told the BBC that 70% of its UK workforce will receive the payment, and stated that it is “offering our shop floor staff the highest annual pay rise for at least a decade”.
XpertHR’s latest figures, based on the outcome of 295 pay settlements effective between 1 March 2022 and 31 May 2022, and covering more than 928,000 employees, also showed that:
- Over 80% of pay awards amounted to a higher increase to employees this year than the same group received last year
- 3% was the most common award, representing almost a fifth of settlements
- Only 3.4% of settlements resulted in a pay freeze.
Sheila Attwood, XpertHR pay and benefits editor, said: “Despite pay awards reaching record levels not seen for 30 years, any marginal increases we are seeing are outstripped by the sheer pace of inflation. There are no signs that pay award levels are going to fall, meaning wage rises are likely to remain steadfastly below the rate of inflation for the foreseeable future.
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“With the threat of further inflationary pressure, businesses that are unable to match pay with inflation should consider where and how they can help employees. Other benefits and financial guidance will not only help retain top talent, but crucially it will help staff weather the worst of the cost of living crisis.”
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