Pay awards continued to climb last month, reaching a median of 5% in the three months to the end of November – their highest level for 31 years.
XpertHR’s analysis of pay settlements that took effect in the last rolling quarter found that the average award increased by one percentage point, up from 4% during the previous three-month period.
However, as inflation continues to grow, most employees suffered a real-terms pay cut. Consumer prices index (CPI) inflation in November was 10.7%, down from 11.1% in the year to October, while the retail prices index (RPI) – which many trade unions base their negotiations on – fell to 14% from 14.2%.
Among a matched sample of pay settlements, 88% saw the same group of employees receive a higher award than they were offered at their previous pay review, according to XpertHR.
There remained a wide spectrum of deals, with those at the bottom end seeing employees receive a 2% pay rise and the largest increase being 10.1%.
Pay settlements in autumn 2022
BT Group and unions agree £1,500 pay rise
Private sector pay continued to accelerate at a faster rate than public sector wages. The private sector median rose to 4% compared to 2% for the 12 months to the end of November 2022, while the public sector median was 3.8%, up from 1.4% in 2021.
This aligns with data released by the Office for National Statistics this week, which showed a gulf between private and public sector average wages.
Autumn is an unusual time of year for pay reviews. XpertHR said the findings should be treated with caution as its analysis focused on only 25 wage reviews with effective dates falling between 1 September and 30 November 2022.
Sheila Attwood, XpertHR senior content manager, data and HR insights, said: “The cost-of-living crisis continues to be high on the agenda of many pay setters as a tumultuous year draws to a close. A sharp spike in inflation coupled with a tight labour market has inevitably placed an upward pressure on wages.
“December will be a crucial month given the current wave of industrial action taking place in the UK, in what is being described as another ‘winter of discontent’. It is more important than ever that employers seek to strike the right balance between employees’ pay expectations and affordability.”
On inflation, Alun Baker, CEO of GoodShape said: “Prolonged inflation is having a significant impact on the UK workforce, both in terms of productivity and health. Over half (57%) of employees say that worrying about finances negatively impacts their ability to do their job and a similar number (52%) are worried about the financial implications of taking time off work when ill.
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“Workers are feeling the strain and powering through illness. Productivity is being dented and employers using short term tactics to remedy the challenge will come unstuck. It’s leaders with the insight to make targeted interventions to support their people in perpetuity who will navigate these challenges best.”
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