Employers are continuing to increase wages by just 2% at their annual pay reviews, the latest data released today by pay analysts at XpertHR shows.
Analysis of the data for the three months to the end of July 2015 finds that the median pay settlement across the economy was worth 2%, with half of all pay settlements worth between 1.6% and 2.5%. Just 6% of all settlements resulted in a pay freeze.
XpertHR's latest findings show that employers are not feeling under any particular pressure to increase wages by more than the going rate. The top three factors that employers predicted would impact on pay awards during 2015 were recruitment, retention, and pay awards in their industry. Although we know that employers are addressing some recruitment and retention issues through pay, if they are following annual pay rises at other organisations in their industry they will see that no one else is making the break away from the 2% mark just yet.
Other key findings from XpertHR's analysis of pay awards effective in the three months to the end of July 2015 include the following:
- Deals settle close to the median - the middle half of pay awards are worth between 1.6% and 2.5%.
- Some higher pay deals - 18.3% of settlements paid increases of more than 3%, although many of the higher awards were as a result of weighting towards the lowest paid.
- Sectors converge - the median pay award in both the manufacturing-and-production sector, and private-sector services, sits at 2%.
- Pay freezes diminish - just a handful of all pay deals (6%) resulted in no increase for employees.
- Public sector continues to lag - pay awards in the public sector were worth a median 1.6% in the 12 months to the end of July 2015, compared with 2% in the private sector over the same period.
The peak time for pay bargaining is now behind us, as just 25% of pay awards across the year typically conclude in the second half. Instead, at this time of year employers are beginning to plan for their organisation's 2016 pay review. Time will tell whether or not 2016 will be the year that pay awards return to the 3% to 3.5% level seen in the years preceding the recession.
XpertHR Pay and Benefits editor Sheila Attwood said:
"Employers are either unable to, or see no need to, increase wages by any more than 2%. So far in 2015, just 28% of pay awards were higher than the same group of employees received a year ago - the majority being at the same or a lower level."
