PAY DATA
Private sector pay settlements reach 3%
A clear gap has emerged between the level of pay awards in the public and private sectors, according to the latest analysis of pay settlements from IDSPay.co.uk. The median pay award for the private sector in the three months to the end of April is 3%, while in the public sector it is zero.
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The private sector median has risen since the last analysis period, driven by an increase in the number of higher-end deals. A quarter of private sector awards in this latest IDS analysis are above 3% (up from 22% in the last analysis), and over a tenth are above 4%. Many of the higher-level awards are in sectors including the car industry and parts of utilities, where awards are once again much closer to levels witnessed before the recession.
Contrasting pressures
IDS says: "In the private sector, settlement levels have risen gently as the economy recovers, though they still remain below the level of inflation overall." This chimes with the Bank of England agents’ latest summary of business conditions which found that pay awards are typically slightly higher than a year earlier, "reflecting profitability over the past 12 months". Also, inflation remains above 5% on the measure typically used to benchmark annual pay reviews, pushing up expectations about pay rises.
IDS adds: "On the other hand, unemployment is still comparatively high, and despite an uptick in employment, the labour market remains fragile with concerns about job cuts in the public sector. Coupled with broader worries about the economy, this might prompt companies to sit tight on cash that, in a period where business expectations were more upbeat, might go into investment and/or wages."
Summary of key settlement data
For the three months to the end of April 2011, based on 88 settlements covering 3.4 million employees in total, the key IDS statistics are these:
Whole economy median: 2.5%
Whole economy average: 2.3%
Whole economy inter-quartile range: 1.5% to 3.0%
Manufacturing and production median: 3.0%
Private services median: 2.8%
Public sector median: 0.0%
Not-for-profit and related services median: 1.8%
A final word
“While our headline figures show that pay settlements remain stable, the whole-economy median obscures a wider reality and clear differences between the public and private sectors. The latest figures show that private sector pay awards are where we thought they would be this time of the year, reflecting a degree of recovery in profitability and higher levels of inflation. However, the picture for 2011 is not yet complete and the outlook is difficult to assess.” - Ken Mulkearn, Editor of IDS Pay Report.
Want to know more?
IDSPay.co.uk is an online source of all the remuneration data collected by IDS, on pay settlements, pay levels and executive compensation. Visit www.IDSPay.co.uk to see a demonstration or to sign up for a free trial.
IDS Pay Report, published fortnightly, is the UK's “leading source of research and analysis on pay and benefits across the economy”. For details visit www.incomesdata.co.uk or tel: 0845 600 9355.
Incomes Data Services is the “leading UK information and research service on employment issues, providing a range of publications for employers, trade unions, government departments and other agencies”. For more information visit www.incomesdata.co.uk.