Pay rises will be slow to return to growth, XpertHR finds

Pay awards in the three months to the end of November were stuck at 2%, according to data from pay specialists at XpertHR.

Basic pay rises have remained at or around this level every month for more than a year, and show little sign of a strong return to growth in 2015, say XpertHR’s pay experts.

Almost a quarter of pay awards logged with its database were worth 2%, making this the most common pay increase.

Just over one in 10 received a 3% pay rise, while 17.8% of respondents said they offered a 1% rise.

Workers in manufacturing and production received the highest pay awards, at a median of 2.3%. This was heavily influenced by one notable pay deal – the Offshore Diving Industry Agreement for divers and life support technicians – which will see 14,000 staff receive a 3.55% increase.

Employers in the public sector – having been subject to pay increase caps for some time – reported an average of 1.5% in wage rises, while pay increases across the private sector remained at 2%.

Organisations offering performance-related pay tended to offer above the median basic pay award, with wage increases between 2.5% and 4%.

Encouragingly, the proportion of employers implementing a pay freeze has almost halved compared with the last rolling quarter (to the end of October), from 12.2% to 6.4%.

However, despite greater competition for candidates and more confidence in the employment market, employers are likely to remain cautious about pay in early 2015, said XpertHR.

In the report, HR practice editor Jo Jacobs wrote: “Many economic worries exist within businesses, including the prospect of higher interest rates in 2015, continued weak export growth and low productivity.”