Data from XpertHR suggests that while pay awards remain at the highest level since December 2008 – when the headline award was at 3.6 per cent – but continue to fall behind inflation, which is expected to hit seven per cent in April. According to the solution provider, the median basic pay increase in the three months to end of February 2022 is worth three per cent, unchanged from the previous rolling quarter.
Based on the outcome of 230 pay settlements with effective dates between 1 December 2021 and 28 February 2022, covering more than 268,000 employees, XpertHR found:
• Majority of pay awards at a higher level. Among a matched sample of pay awards, the majority (84.7 per cent) of employee groups received a higher award than in the previous year. Just over one in 10 (13 per cent) received a pay award at the same level and a handful (2.3 per cent) were lower than the previous year.
• Pay freezes few and far between. Just eight pay deals among our current sample (3.5 per cent) resulted in a nil increase for employees, compared with 34 per cent this time a year ago.
Alongside its usual pay award findings, XpertHR also collected responses from 303 organisations for its 2022 pay forecast survey. It found pay rises are forecast for nine in 10 employees (89.8 per cent) through 2022, meanwhile pay freezes are predicted to drop to 4.7 per cent – compared to 18.5 per cent the previous year. At the time of the survey the outcome for the remainder (5.5 per cent) is still to be determined.
XpertHR survey respondents expect:
• Median pay award of 3 per cent over the course of 2022.
• Pay settlements to be fairly widely spread in the range, with the middle half spanning two percentage points from 2.5 per cent at the lower quartile to 4.5 per cent at the upper quartile.
• 40 per cent of pay awards to be worth 4 per cent or more.
“The recent increase in XpertHR’s headline pay award reflects employers trying to keep pace with rising inflation and contending with labour market shortages,” said Sheila Attwood, XpertHR pay and benefits editor. “But what would have been a reasonably high pay increase a year ago, global pandemic aside, now feels inadequate. With the latest predictions from the Bank of England suggesting that consumer prices index inflation could reach around seven per cent in spring 2022, a three per cent pay rise equates to a notable real terms pay cut, as the gap between wages and the cost of living continues to widen.
“To mitigate the issue, some employers plan on offering one-off payments on top of the annual pay review and others are considering a supplementary non-consolidated payment to be paid quarterly for the rest of 2022 directly in response to the cost-of-living increases,” she added.
