Pay awards have fallen for the second consecutive quarter, new data has revealed.
The figures from XpertHR showed a 0.4% drop in median basic awards in the three months from June to August compared to the quarter which ended in May, from 5.4% to 5% respectively.
However, the research – which covered 61 pay awards and more than 600,000 employees – found the median award of 6.4% in the public sector for the same period was the highest in more than 11 years.
Despite this increase, the data suggests pay awards are beginning to subside after reaching a peak and workers should anticipate the gap between wage growth and inflation becoming more favourable, according to XpertHR.
The study also revealed that the most common agreement was 5%, with more than a quarter (25.6%) worth that percentage, and that 70% of those awarded were greater than 2022 deals.
Sheila Attwood, XpertHR senior content manager, data and HR insights, said: “The past year for those involved in reward has been characterised by contending with historically high inflation and a tight labour market, while employees have been battling with the effects of the high cost of living. The impact of this has been reflected by pay awards reaching levels not seen for 30 years.
“However, this month’s data reinforces the XpertHR view that we have reached the peak of higher pay awards, and for the remainder of the year we can expect settlements and increases in pay to slowly begin to fall. Although the latest data from the ONS indicates significant pay growth over the past three months, the level of growth was the same as in the previous quarter.”
A review of 943 pay awards from 1 September last year to 31 August this year further highlighted that the median basic pay award is 6%, up 2% from a year ago, while the median budget allocated for performance-related pay awards is 5%, also higher than the previous year.