Pay deals rise back to 3 per cent

pay deals are back at 3 per cent, according to the latest figures from
Personnel Today’s sister publication and pay analysts IRS.

the UK
enters the quieter period of pay bargaining over the summer months, the IRS pay
databank measure of pay awards across the whole economy – the mid-point in the
range of recorded deals – has risen to 3 per cent for the three months ending
July 2004.

headline figures for the previous three rolling quarters have also been revised
upwards from 2.9 per cent to 3 per cent, as more settlements have been added to
the IRS pay databank. This means that the IRS measure of pay settlements has
remained at 3 per cent for every rolling quarter since March 2003.

key findings include:

Inflation matching pay awards: now that pay awards have returned to 3 per cent,
they are matching the level of headline inflation, which means that employees
are receiving a cost of living increase

Public and private sector pay growth even: the median pay award in both the
public and private sectors is 3 per cent in the 12 months to July 2004

Pay deals lower than a year ago: analysis of a matched sample of pay deals, for
which IRS has collected information on the latest and previous pay awards,
reveals that exactly half are worth less this time round. Around one-third paid
a higher settlement, while the remaining fifth received the same increase

Public sector pay: following the more subdued pay settlements awarded to the
large public sector groups covered by the pay review bodies, IRS expects
similar restraint in other key areas of the civil service as their pay
bargaining gets under way

National Minimum Wage (NMW): several employers contacted by IRS are undertaking
additional pay reviews this autumn to accommodate the rise in the NMW. It will
increase by 7.8 per cent, from £4.50 to £4.85 an hour on the adult rate, from 1 October 2004.

Pay and Benefits editor, Sheila Attwood, said: "It will be interesting to
see how private sector pay responds to the increase in headline inflation
expected in the second half of the year.

public sector pay, the picture is quite different. The single largest pay deal
in the economy – covering 1.3 million local government employees – paid a
below-trend 2.75 per cent from 1 April 2004," she
added. "If the rest of the public sector follows their lead, pay
settlements here will be an enviable benchmark for private sector employers."

By Mike Berry



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