Median pay awards increased to 4.9 percent in the three months to the end of April 2024 from 4.6 percent for the quarter before, data from Brightmine has shown.
But in spite of the rise, the pay award was still below the median basic pay settlement of 5 percent recorded for the 12 months to the end of April 2024.
As April is the busiest month for pay reviews, Brightmine said this data offers an indication of what pay activity could look like for the rest of 2024.
Awards lower than 2023
Analysts said pay awards in the last few months have been consistently lower than pay settlements in 2023, with more than half (52 percent) of deals below those seen last year.
However, Brightmine said that as inflation continues to decline, the median pay award over the past year is 1.8 percentage points higher than March’s consumer prices index figure of 3.2 percent.
Inflation figures out today (22 May, 2024) show the consumer prices index (CPI) has continued to fall. The Office for National Statistics confirmed CPI was 2.3 percent in April 2024, down from 3.2 percent the month before. Another measure of inflation, the consumer prices index including owner occupiers’ housing costs (CPIH), had dropped to 3 percent in April down from 3.8 percent in March.
Sheila Attwood, senior content manager, data and HR insights at Brightmine, said: “We have seen a noticeable drop in the level of pay awards since last year – from 6 percent in 2023 to just under 5 percent in the first quarter of 2024. However, we are now noticing some stability, as the first April settlements are also centred on this level.
“We are continuing to see a minority of organisations offering different awards to different groups of employees, typically based on salary, indicating that measures to help the lowest paid with the cost of living have not completely disappeared.”
Pay freezes
The data also showed that one in 20 deals are pay freezes. Basing its analysis on 102 pay settlements between 1 February and 30 April 2024 that covered 355,064 employees, Brightmine found that wage freezes accounted for around one in 20 (4.9 percent) settlements. However, analysts cautioned that due to the low number of pay freezes in general, it is important to interpret this statistic with caution.
The interquartile range of awards also narrowed with the middle 50 percent of basic pay deals falling between 4 percent and 5.1 percent. Researchers said that this is the narrowest range seen since 2021, which indicates that there has been little variation in basic pay agreements across the whole economy.
