Pay awards for second quarter double

Pay awards remain at 1%

Pay awards for the second quarter of this year were worth twice what they were during the same period in the first quarter, according to analysis from XpertHR. 

In the three months to 30 June 2021, the median pay award was 2%, double the 1% recorded in the first three months of this year. 

However, XpertHR argued that this pay acceleration will not continue, with the 2% median having remained steady for the past three rolling quarters. 

In the public sector, the value of pay awards fell for the first time in almost three years. Since the 12 months to the end of August 2019, public sector pay growth was fixed at 2.5%, but slipped to 2.3% for the 12 months to the end of June 2021. 

For the 2021 pay round, the government implemented a pay ‘pause’ for much of the public sector. However, NHS frontline staff and other public sector workers on annual salaries of £24,000 or less were guaranteed a pay rise of at least £250.

In contrast, the second quarter saw private sector pay awards pick up, with the median award reaching 2% for the third consecutive quarter. Food manufacturers, chemical companies and retailers gave out the highest ones.

The proportion of employers placing a freeze on pay continued to decline this quarter. In manufacturing and production, for example, just 7.5% of deals resulted in a 0% increase. Overall, pay freezes accounted for just 15.9% of all reviews. 

XpertHR also found that the cut-off point for the highest 25% of deals edged higher, at 2.3%, while the lower quartile remained unchanged at 1%. 

The service sector, which has been hard hit by the pandemic, saw pay awards dip to a median of 1.9%, just under the 2% recorded in manufacturing. 

Slightly more than half (54%) of the pay awards in the current quarter were worth less than the same matched group received a year ago, according to XpertHR. A quarter were at the same level, and a fifth were higher than deals awarded the same quarter a year ago. 

Sheila Attwood, XpertHR pay and benefits editor, said: “As we navigate the post pandemic world, organisations are understandably still being cautious in their approach to annual pay reviews, and while we have seen some growth from the awards made in the early months of the year, we are unlikely to see this level of acceleration continue. 

“Despite this, it is still encouraging to see the proportion of pay freezes decline in 2021 as confidence returns.”