Employee pay is rising at its quickest level for more than 13 years, according to new data.
The median increase in basic wage handed to staff in the three months to the end of January this year was 3%, according to research by XpertHR.
The benchmarking and compliance specialist analysed 101 salary settlements that became effective in the three months to the end of January this year, covering more than 170,000 employees.
It found the sharpest rate of increase in pay since December 2008 and a significant jump from a median award of 2% in the rolling quarter to December 2021.
Sheila Attwood, pay and benefits editor at XpertHR, said: “The dramatic rise in the median basic pay award is direct evidence of the inflationary pressures on both employers and their employees.
“Against the advice of Andrew Bailey, the governor of the Bank of England, employers have sought to protect employees from bearing the brunt of a cost-of-living crisis that is expected to last until 2023.
“The Bank of England now expects consumer prices index (CPI) inflation to peak at 7.25% in April 2022. This is higher than predicted in its November 2021 report, which means further increases in pay awards are almost a certainty.”
Employees at all salary levels appear to be benefitting from pay rises, with those at the lower quartile mark seeing a 2.5% hike in the most recent period, up from 1.3% just a month earlier.
Higher-paid staff at the upper quartile line received a 4.1% increase in the latest round of settlements, compared with 3% previously.
And just 7% of employees received a pay freeze in the three months to 31 January 2022, compared with around 33% a year earlier.
Four in five organisations whose data is available awarded higher pay rises this year than in the same period 12 months earlier.
XpertHR noted that public sector pay is generally determined in the summer while many private firms decide on salaries in January.