There is no denying that there are wage pressures in the economy. But these are not translating into higher pay rises being awarded, says pay specialist XpertHR (formerly known as IRS).
There is currently upward pressure being exerted on pay awards from a number of different areas:
· Employees have seen two years of little, or no, pay rises, and will be seeking some recompense for this in this year's pay award.
· RPI inflation – the key benchmark for pay awards – is high, at 5.3%. It is expected to fall only marginally during the remainder of 2011.
· The worst of the recession is now over and some companies are beginning to feel more optimistic about business conditions.
However, three sets of research from XpertHR confirm that pay settlement levels remain subdued:
· Figures released today show that the median basic pay award in the first quarter of 2011 is 2.3%. Half of all pay awards are worth between 2% and 3%, while outside of this range pay awards are fairly evenly split – 14% are worth less than 2%, while 14.5% are worth more than 3%.
· XpertHR's pay forecast survey, reveals that the median forecast pay increase is just 2%.
· An early look at pay awards for the three months to April 2011 (the busiest month in the pay-setting calendar) reveals that pay awards have actually fallen, to a median 2% basic increase. The proportion of pay freezes has also increased in the provisional figures for April (from 9.2% of pay awards in March, to 24.7% of deals in April).
XpertHR Pay and Benefits editor Sheila Attwood said: "Employers may well be feeling under pressure to award higher pay increases. But at the end of the day the uncertain economic situation means that they are not reacting to this pressure, and continue to award only modest pay rises.
"It is likely that employees will continue to exert pressure on employers for a decent pay rise, but our research suggests that pay rises will remain well below 3% for the remainder of 2011."