More than half of pay deals are expected to be lower than those awarded in 2023, with early data for January suggesting the median has fallen.
Data from XpertHR showed that the median basic pay award in the three months to the end of December 2023 remained at 6%, a value that was maintained throughout most of 2023.
The final quarter of the year is traditionally a quiet time for pay awards. The data is based on 15 settlements covering 43,723 employees.
However, Sheila Attwood, XpertHR’s senior content manager, data and HR insights, said that the median award among the first few pay deals to come through in January has fallen to 5%, with almost half of January 2024 pay settlements lower than the same employees received a year ago.
She said: “With pay awards having hit their peak, and employees still dealing with the impact of the rising cost of living, organisations will need to find an alternative way to support staff.
“One way is by optimising their benefits package. Employers can analyse employee benefit data to identify what is most popular among staff and make sure that what they offer is being used. As well as looking inwardly at their own data, organisations can benchmark against others in the market in order to remain competitive and be sure their package is hitting the right mark.”
Seventy-six per cent of pay awards in 2023 were higher than the same group received in 2022. Only 12.9% received a lower pay award.
Public services recorded the highest pay deal at 6.5%. Within the public sector, local government led with an average award of 9.2%, while central government pay deals were the lowest at 4.5%.
In the manufacturing and production sector, the median pay award for 2023 was 6%. The lowest increases were seen in construction (5%) and general manufacturing (5.5%), whereas the electricity, gas, and water sectors led with a 7.5% median.
In private sector services, the median pay award was 6%, with facilities, security, and support services experiencing the highest rise at 8%. The lowest median award was recorded in the professional and business services industry (5%).
The not-for-profit sector reported a median pay award of 6%.
Official figures from the Office for National Statistics showed that annual growth in employees’ regular earnings excluding bonuses in Great Britain was 6.6% in September to November 2023, while average total earnings including bonuses grew by 6.5%.
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