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Latest NewsPay & benefitsPay settlements

Private sector pay deals reach three-year high

by Laura Chamberlain 20 Jan 2012
by Laura Chamberlain 20 Jan 2012

Private sector pay bargaining got off to a good start in January as pay rises hit their highest level in three years, despite remaining stagnant throughout much of 2011.

This is according to XpertHR’s latest pay trends report, which found that the median average pay award for January 2012 was worth 2.8%, the highest since December 2008 when the figure stood at 3.7%.

In 2011, median private sector pay rises were between 2% and 2.5%, and pay awards across the economy stagnated at 2% for much of the year.

Additionally, the vast majority of pay awards lagged behind inflation in 2011, with just 2% of settlements keeping up with the retail prices index (RPI).

However, according to the report, which was based on the details of 41 pay awards settled in January, if the pace of decline in inflation continues, there will be an opportunity for employers to make up for “years of low pay rises” with an above-inflation pay increase in 2012.

Sheila Attwood, XpertHR pay and benefits editor, commented: “The data collected to date suggests that pay bargaining in 2012 has got off to a good start and that, for many private sector workers, pay rises higher than the levels seen in 2011 are a real prospect.

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“Over the past few months we have started to see evidence of a shift to higher pay awards than were made the year before. We now find that the majority of pay awards are at a higher or the same level as paid to the same group of employees the year before, with only a handful making lower awards.”

View further information from XpertHR’s pay trends report for January.

Laura Chamberlain

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