Basic pay awards remain at 1%

Pay awards remain at 1%

Median basic pay awards in the first quarter of 2021 were less than half the value of that seen in the same period in 2020, at just 1%.

This is according to the latest analysis of pay settlement data by XpertHR, which showed the average pay award recorded across the three months to the end of March has remained at this level for the fourth consecutive rolling quarter.

A year ago, just as the Covid-19 (Coronavirus) pandemic hit the UK, XpertHR recorded a median pay award of 2.4% in the three months to the end of March 2020.

Since then there has been a flurry of pay freezes but where a pay increase has been awarded, 2% has been the most common figure.

However, there are some signs of improvement for some employees.

XpertHR pay and benefits editor Sheila Attwood said: “April is the busiest month of the year for pay settlements to take effect, accounting for almost half of the total sample collected by XpertHR.

“Early results from April pay awards suggest some upward movement in the headline measure, as the median for this month alone currently stands at 2%. However, pay freezes remain commonplace, and the majority of deals are lower than the same employees received last April.”

XpertHR’s analysis of 217 pay settlements further found that a third (33.5%) of settlements in the past three months amounted to a pay freeze.

Three-quarters (76.9%) of awards in the three months to the end of March were lower than what the same group of employees received a year ago; 16% were the same and 7.1% were higher.

The study further showed that pay awards in the manufacturing and production sector have picked up to 1% in Q1 2020 after many months of pay freezes, while those in the services sector are running at 1%.

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In the retail and wholesale sector pay awards are recorded for some of the larger, essential retailers, while pay freezes are widespread among firms that have had to close their stores for large parts of the year.

In the transport sector, tourism-related enterprises including airports and airlines are more likely than logistics providers to have recorded a pay freeze.