Pay awards in the three months to the end of July 2018 were worth 2.3%, according to the latest data from pay analysts at XpertHR.
The latest data marks the first time since September 2016 that our median figure has fallen (having either remained steady, or risen, in every month). However, the numbers are very finely balanced – just a deal or two worth either more or less than 2.3% would push our figures up to 2.5% or down to 2% respectively.
The dip is in line with the latest average earnings data, which showed that earnings growth fell to 2.4% in June, the slowest rate of growth since September 2017. Inflation has also fallen, with the July 2018 RPI figure (3.2%) being the lowest level since March 2017.
Yet there is clearly still an appetite to reward employees at a higher level than last year. In our latest sample, 65.3% of awards are higher than the same group of employees received at their previous pay review. This continues the trend we have seen since the beginning of the year, with employers offering higher pay awards – something that had not been the case in recent years. In addition, there has been no impact on our upper quartile measure, with a quarter of pay awards still worth 3% or more.
We have now moved into the quiet part of the pay bargaining calendar, as more than seven in 10 pay settlements recorded on the XpertHR pay databank are effective in the first four months of each year.
Latest pay award findings
Based on a sample of 51 pay awards from across the economy effective between 1 May and 31 July 2018, we find that:
The median pay award made by employers was 2.3%. This is down from 2.5% in the three months to the end of June2018, but higher than the 2% recorded a year ago.
A quarter of pay deals were worth 1.8% or less, while a quarter were worth 3% or more.
Manufacturers made pay awards at a median 2.9%, compared with 2% among private-sector services firms.
Over the 12 months to the end of July 2018 the median pay award in the private sector was 2.5%, compared with 2% in the public sector – the latter being the amount awarded in the Armed Forces and the Prison Service, as well as by numerous local authorities.
XpertHR pay and benefits editor Sheila Attwood said:
“Although we have recorded a small dip in the level of pay awards this month, they are still running higher than a year ago and the majority of employers are rewarding employees with a greater increase than at their previous pay review.”
For the full report visit the XpertHR website