Our latest analysis of the reward calendar (subscription required) reveals that bargaining is tightly bunched in the year, with employers favouring just a few months in which to settle their pay reviews. April is the key month, in which well over one-third (38.2%) of UK workers receive their annual pay award, while a further one in four (25.3%) settle in January.
But what level of increases can UK workers look forward to in 2009?
It's a fairly safe bet that public sector increases will once more cleave closely to the government's 2% inflation target.
In the private sector, our 2008 survey of pay prospects sounded an optimistic note (subscription required), with employers expecting the median pay award to be worth 3.5% in 2008/09.
Our latest pay data also offer some positive news. The IRS headline pay award currently stands at 3.8% (subscription required) for the three months to 30 November 2008, overtaking inflation for the first time in more than two and a half years.
But worsening economic conditions could result in a very different picture emerging come the new year. The recent higher trend in pay awards is primarily due to the 3.8% national minimum wage uprating (subscription required) that took place in October 2008. Once this falls out of our rolling quarterly sample, there is every possibility that our headline award will fall back.
January will therefore provide the first clear indicator of the likely direction of pay awards over the coming year, as well as clear evidence of how pay deals are being affected by the rapidly deteriorating economic environment.
- Has your organisation recently carried out an annual pay review? If so, and if it has now been settled, please get in touch so that we can add your organisation's pay award to the IRS database.
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Comments (2)
Question: does your methodology track pay decreases. 10% announced by one person on Twitter.
An average is useful. But knowing average increase and average decrease is also useful.
Posted by Jo | January 2, 2009 10:10 AM
Posted on January 2, 2009 10:10
Thanks for your question, Jo. The methodology underpinning the IRS pay databank tracks all movements in whole economy pay awards, as well as by specific industry sectors.
Any pay cuts affecting employee groups covered by the IRS pay databank that might occur will therefore be reflected in our monthly analyses of pay trends.
However, it is worth noting that at present, our current sample of pay awards does not include any pay cuts. Indeed, as we noted in our latest look at whole economy pay trends (http://www.xperthr.co.uk/article/90410/.aspx#key), our sample of pay awards with effective dates falling in the three months to 30 November 2008 includes details of only two pay freezes.
As always, we will be keeping a close watch on pay data collected by IRS researchers over the coming year, with a particular vigilance - given the current economic climate - for details of any pay freezes or pay cuts that might occur.
Posted by Michael Carty
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January 3, 2009 8:19 AM
Posted on January 3, 2009 08:19