Are you up to speed with current UK pay trends?
There has been much in the media about pay awards and what might or might not happen after Brexit. According to XpertHR’s recent benchmarking review, the headline measure of pay settlements has fallen for the first time in almost two years. Is this a sign that lower pay awards are on the way?
XpertHR’s latest analysis covers the three-month period between 1 May and 31 July, traditionally a quieter period for pay bargaining than the first four months of the year and therefore based on a reduced sample size. However, they collected details of 74 pay awards across the economy, collectively covering just under 900,000 employees.
Some of the key points in the benchmarking include:
- Median falls slightly. The median basic pay award in the three months to the end of July 2018 stands at 2.3%, down from 2.5% recorded in the previous rolling quarter.
- Higher awards than last year prevail. The pattern of higher pay awards for employees than last year continues, with 65.3% providing a greater increase than was paid at the previous pay review. The proportion making a smaller award – just 12.2% – remains low.
- Manufacturing sector retains lead. Pay awards in the manufacturing-and-production sector are steady at a 2.9% median and continue to run ahead of services, where the median award has fallen to 2% (from the revised figure of 2.3% last month).
- Merit awards strong. The median pay bill increase for performance-based pay awards stands at 2.9% over the past three months.
In the services sector overall, which includes both public and private organisations, the median has also fallen to 2%, a level not seen since December 2017. However, manufacturing and production sector has a strong level of pay bargaining in the sector at present.
The headline value of pay awards in the manufacturing-and-production sector stands at 2.9% – unchanged on the revised figure for last month. Out of the admittedly small sample, only two of the 16 pay settlements recorded are worth less than 2.5% – reflecting the strong level of pay bargaining in the sector at present.
The table below shows the % pay awards across different sectors.
|Sector (sample size)||Lower quartile, %||Median basic pay award, %||Upper quartile, %|
|Manufacturing and production|
|Chemicals, pharmaceuticals and oil (47)||2.4||2.7||3.0|
|Electricity, gas and water (25)||2.9||3.0||3.6|
|Engineering and metals (42)||2.1||2.5||3.0|
|General manufacturing (88)||2.0||2.5||3.0|
|Total manufacturing and production (257)||2.0||2.8||3.0|
|Hotels, catering and leisure (85)||2.0||2.8||3.2|
|Information and communication (46)||1.8||2.5||3.0|
|Professional and business services (63)||1.7||2.0||2.5|
|Retail and wholesale (41)||2.0||2.4||3.0|
|Transport and storage (25)||2.3||2.8||3.4|
|Total private-sector services (347)||2.0||2.5||3.0|
|Public sector (27)||2.0||2.0||2.0|
|All economy (631)||2.0||2.5||3.0|
So is your organisation in keeping with the findings from the XpertHR survey? If no, carrying out a salary survey does not need to be complicated or expensive.
Please get in touch if you’d like to discuss any challenges around benchmarking and pay in your organisation. We’d be pleased to help you.
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