Staff pay rises are four times higher than inflation

Employees are currently enjoying pay rises worth more than four times inflation, according to figures by Personnel Today’s sister organisation, pay specialists Industrial Relations Services (IRS).


The median basic pay rise for the three months to December 2008 was 3.8%, while retail prices index (RPI) inflation for the same month stood at just 0.9%. Pay rises have not been this far above RPI inflation since August 1986.


However, pay awards are unlikely to stay at this elevated level as January pay bargaining gets underway, with early indications that deals are slipping back to 3%. They could even drop as low as 2.5% by Easter, according to IRS Pay and Benefits editor Sheila Attwood.


“The record gap between pay rises and RPI inflation will narrow as we move through the year,” she said. “There is already an early indication that pay deals in January are lower than those at the end of 2008, and we expect them to fall further as the year progresses. April pay awards could be down to 2.5%.”


The findings are based on 62 pay awards for the three months to 31 December 2008.

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