Pay awards staged a slight recovery in the closing months of 2009 (subscription required), with the headline award standing at 1.2% over the three months to 31 December 2009, according to latest data from reward specialists at IRS. But the pay outlook is uncertain: pay awards could either stage a further weak recovery in 2010, or slump back toward their recent all-time low of zero.
These findings are based on details of 73 pay awards concluded over the three months to 31 December 2009, covering 635,113 employees. Of these, 67 provide for a basic pay increase.
Final IRS pay data for 2009 reveal the following:
- The median basic pay award was 1.2% in the three months to 31 December 2009, down slightly from 1.3% in November. The headline pay award has now been worth 1% or more for four successive rolling quarters.
- Almost all pay awards are lower than a year ago.
- Pay awards have rebounded to some extent from the all-time low of zero recorded in July and August 2009. But the 1.2% headline award is worth less than one-third of its value a year ago (3.7%).
- The whole economy headline pay award for the 2009 calendar year (the 12 months to 31December 2009) was 1%.
With regard to pay prospects for 2010, IRS Pay and Benefits Bulletin editor Sarah Welfare comments:
We are unlikely to see any huge leap in the value of pay awards as the economy slowly recovers. But employers will be under pressure from employees who are unwilling to accept a pay freeze for a second year, and with inflation on the up, it is likely that we will see slightly higher pay rises in 2010 than in 2009.
- 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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