Pay awards show signs of stabilisation

Pay awards have started to stabilise after uncertainty throughout the previous year due to the coronavirus crisis.

In fact, the median basic pay award between May and July 2021 was worth two percent – a figure that has remained unchanged in each of the previous rolling quarters.

According to XpertHR who shared the data, this is a welcome stabilisation after the median pay award dropped to zero in the same period this time last year.

The same research found that the median pay award in the public sector sits at two percent, while in the public sector it is currently at 1.5%. The whole economy median over the year to end of July 2021 is also 1.5%.

However, the value of pay awards in the public sector has fallen to two percent in recent months, having sat at a static 2.5% for the past few years.

Sheila Attwood, pay and benefits editor at XpertHR, revealed that while 2020 marked the worst year for pay awards for a number of years, the latest figures are “welcoming”.

She continued: “2020 marked the worst year for pay awards since 2010, so it is welcoming to have seen pay deals rising and now stabilising. It is likely that awards will remain at this level as employers are still regrouping and looking to strike the balance between recruitment and wider reward package costs.”

However, she warned that while restrictions have eased “uncertainty still remains”.

Other findings from the research revealed that half of pay rewards are higher. In a matched sample of 28 pay deals, 54% are higher than the same employee group from the previous year, while a quarter are lower.

It also discovered that pay freezes are becoming less common. The data found that just two settlements recorded at nil, compared to the same period last year where pay freezes accounted for more than half of the total sample of pay settlements.

Check out the latest issue of Reward Strategy for more details on pay and reward here.