The latest data from XpertHR shows that the median basic pay increase in the three months to the end of June 2022 was 4 percent, unchanged for the third consecutive rolling quarter despite soaring inflation.
Despite holding at the highest recorded level since September 1992, pay awards continue to fall short of soaring inflation, now lagging 5.1 percentage points behind the latest Consumer Price Index, which stands at 9.1 percent (May 2022).
As the squeeze on household budgets continues and employers struggle to manage pay expectations, some workers have resorted to taking strike action, including rail staff who staged the biggest rail walkout for 30 years in June.
Latest pay award findings:
Based on the outcome of 324 pay settlements with effective dates between 1 April 2022 and 30 June 2022, covering almost 780,000 employees, XpertHR also find that there is also a wide interquartile range. The middle half of pay awards are worth between 3 percent (the lower quartile) and 6 percent (the upper quartile).
Also, the majority of pay awards are higher than the previous year. Among a matched sample of pay awards, 83 percent are higher than the same group received the previous year. Just 6.9 percent are lower and 10.1 percent are at the same level.
It was also found that the most common pay award is 3 percent. Pay deals worth 3 percent account for almost one in five (19.1%) basic awards, followed by a 5 percent increase which accounts for one in ten (10.1%) deals.
The research also shows that pay freezes are relatively rare. Only 3 percent of pay settlements resulted in a pay freeze in the three months to the end of June 2022.
Sheila Attwood, pay and benefits editor at XpertHR, said:
“Pay awards appear to have plateaued after a third consecutive rolling quarter held at a 4 percent median.
Inflation, on the other hand, has showed no sign of slowing down, with the Consumer Price Index (CPI) expected to remain high through the second half of 2022. The Bank of England says inflation should begin to slow in 2023 and gradually drop down to 2 percent over the next two years.
“For the many people suffering financially, this year’s pay rises will not be enough. Employers should aim for pay rises that get as close to inflation as they can, to support their staff. They should also explore alternative ways that they can help – whether that be through benefit packages that supply discounts for the weekly shop, or financial guidance that advises staff on how to best manage their money, it all helps employees to weather the cost-of-living crisis.”
Amelia Brand is the Editor for HRreview. With a master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.