Pay settlements have reached an eight-year high, rising to 3.5% in the three months to the end of January, according to research by Personnel Today’s sister publication IRS Employment Review.
Pay settlements – the median in the range of basic awards – were up from 3% the previous rolling quarter, the highest median pay increase recorded by IRS since November 1998.
The latest study analysed details of 106 pay awards, of which 78 showed an identifiable increase in basic pay.
Pay awards were also found to be higher in the manufacturing sector than the services sector. The median pay award in the manufacturing sector for the three months to the end of January 2007 matched the whole economy median, at 3.5%. However pay awards in the services sector were slightly lower, with the median pay settlement at 3.4% in the rolling quarter to January 2007.
IRS pay and benefits editor, Sarah Welfare said: “Our prediction that rising headline inflation would feed though to pay awards by January is borne out by our latest findings.
“The lag effect between inflation and pay settlements makes it likely that many pay awards will continue to be influenced by the RPI inflation increases during the latter part of 2006. We expect to see a pattern of higher pay awards continue in the first few months of 2007.”