Partner Article

Pay rises lag behind inflation

Pay rises continue to lag behind inflation, according to recent figures released by pay specialists XpertHR.

In the three months to the end of May 2012, the median basic pay award was 2%, unchanged from the previous rolling quarter and down 2.6% during the first three months of 2012.

This is significantly below the May 2012 retail price index inflation, which currently stands at 3.1%, 1.1% higher than average pay awards.

The public sector is currently witnessing a pay freeze, while firms in the private sector have implemented an increase on 2.5%. 18.65 of pay settlements resulted in a pay freeze, while a third of settlements were worth the same as the increase paid to the same group of employees in 2011.

XpertHR Pay and Benefits editor Sheila Attwood said: “Employees in the manufacturing sector are enjoying the highest pay awards this year, but for most workers pay increases remain below pre-recession levels.

“The 3.5% median increase in the transport and communication sector is the only one that touches the levels seen prior to 2008, with many sectors – including retail, general services, paper and printing, and not-for-profit – recording pay awards well below par.

Analysis of pay awards effective in the first five months of the year reveals some significant differences by sector. Overall in 2012, the median private sector pay award stands at 2.5%, with half of all awards worth between 2% and 3%. By sector, increases range from a median 2% in the not-for-profit sector, to 3.5% among transport and communication firms.

Sheila added: “Despite an increasing number of pay deals worth 3% or more, there are also a significant number sticking to wage freezes. Combined, these are keeping our overall median pay increase subdued in the first half of the year.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .