Pay increases remain at 6%

Median basic pay increases remain at 6% in the three months to the end of March 2023, unchanged from the previous two rolling quarters.

Pay settlement data from XpertHR showed that 78.4% of pay increases are higher compared to the same period 12 months ago. The median increase in pay for March 2023 was 6%, compared to 3.7% in March 2022.

The research found that the most common outcome of a pay review was a 5% rise with one in six settlements (16.7%) resulting in a basic pay increase of this level.

With inflation still in double digits (10.1%), pay in real terms continues to fall as living costs erode rises.

The construction industry is lagging behind at a 2.5% increase compared to utilities at 6.6% – a contributing factor is the long-term deals signed within the sector that were negotiated before inflation started climbing a year ago.

Sheila Attwood, XpertHR senior content manager, data and HR insights, said: “Although pay rises continue to reach record levels, UK employees will still feel the financial squeeze as inflation remains above expectations.

“With food and drink prices remaining stubbornly high, real-term wages are set to shrink and employers can expect workers to maintain their push for raises to shield themselves from rising living costs.

“April is the most important month in the annual pay settlement calendar and tensions between employers and employees will be heightened, particularly in the public sector. Of course, inflation is expected to fall throughout the year, however, employers must maintain an open dialogue with their employees to factor in recent developments. Lack of transparency and a negative workplace culture will only compound issues further.”

XpertHR’s newest data examined the outcomes of 272 pay awards across the public and private sectors, covering over half a million employees.

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Only 1.5% of employers responded to the research that their pay had not increased at all, a decrease from 2% in the previous month.

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