According to new research, pay awards have stabilised after the year of uncertainty created by the pandemic.

New data from XpertHR shows that between May and July 2021, the median basic pay award was worth 2 per cent, the same figure as the three previous rolling quarters.

Many professionals are welcoming this stabilisation, as just a year ago, the median pay award fell to nil.

In terms of the public sector, in the 12 months to the end of July 2021, the median pay award sits at 2 per cent, but the private sector sees slightly less, with 1.5 per cent at the median.

Notably, in the services sector, the median in the three months to the end of July is 2 per cent, with almost two thirds (63 per cent) of pay awards worth this or more.

This figure is the highest that the sector has recorded since last November, which may be attributed to increased confidence from bosses as restrictions ease.

The research also found that, in a sample of 28 pay deals, over half (54 per cent) are higher than the same employee group received the previous year. However, a quarter (25 per cent) are lower.

Optimistically, more than one in five (21 per cent) are set at the same value as the previous year, signalling that pay awards have reached a period of constancy, as in the same period in 2020, more than half (61 per cent) were lower.

Employees may also be encouraged by the fact that the study found pay freezes becoming less common, with only two settlements in the current three-month sample recorded at nil.

This is encouraging when compared to the same period last year, as pay freezes accounted for more than half (51 per cent) of the total sample of pay settlements.

Sheila Attwood, XpertHR pay and benefits editor, said:

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.

Despite movements to end restrictions and a move towards a ‘return to normal’, best reflected in the two percentage points increase in private sector median pay awards over the past year, uncertainty still remains.


*In order to obtain this data, XpertHR has collected details of 36 pay settlements effective between 1 May and 31 July 2021.