In the three months to the end of March 2009, pay awards stood at a median 2.8%. The last two months have seen pay awards fall below 3% for the first time since March 2003.
And there are no signs that this gloom is going to lift. An early look at pay awards in April - the busiest month of the pay-setting calendar - reveals that the median could fall as low as 1.5%. Never before in the 25 years (subscription required) in which we have been collecting pay settlement data have pay awards fallen below the 2% mark.
Key to the level of pay awards over the next few months will not only be business confidence, but also the rate of retail prices index (RPI) inflation. RPI fell into negative territory for the first time in March 2009.
Already more than a quarter (26%) of pay deals we have recorded are pay freezes. Many more organisations are delaying a decision on their 2009 pay review until later in the year. However, it is increasingly likely that many of these employers will also ultimately impose pay freezes.
- Has your organisation recently carried out an annual pay review? If so, and 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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