The median basic pay award by British employers dropped to 5.7% in the three months to 31 July 2023, according to XpertHR.
The figure, down from 6% in the six previous rolling quarters, remains below the inflation rate, currently at 6.8%.
The most common pay award between 1 May and 31 July 2023 was 5% – representing around one in six pay settlements during this period.
The lower quartile dropped to 4%, with the upper quartile at 8%. Only one in 10 deals were above 10%, with the highest at 13.5%.
Median pay awards for the public sector rose to 5% in the year to 31 July, up from 3.2% in the year before.
Commenting on the figures, Sheila Attwood, senior content manager at XpertHR, said: “While the ONS announced last week that pay growth has hit a record high, our figures indicate that pay awards are likely to have hit their peak, as our research records a fall in the median pay award for the first time this year.
“However, both sets of data show that pay is still lagging behind inflation, leaving many employees struggling to manage the cost of living,” she added
Attwood believes a narrower gap between pay awards and inflation is on the horizon, but also insisted that there is room for employers to provide more support to workers.
“Aside from pay, employers need to consider other avenues to not only support employees but retain them too – so looking at benefits offered, training and development implemented, and flexibility granted,” she said.