The latest data from XpertHR shows that the median basic pay increase in the three months to the end of May 2022 was worth 4%, unchanged from the previous month, and still at its highest level since September 1992.


Not only does the median pay award far exceed levels recorded a year ago, when it stood at 2%, but it is also notably higher than the 3.2% median recorded across the first quarter of the year.


The range of pay awards has also increased, with the middle half of deals worth between 3% and 5.8%. This wide spread of deals around the median, which is currently at 2.8 percentage points, is indicative of the lengths some employers are going to to address recruitment and retention challenges through salary increases.


Despite pay deals remaining high, the median award still lags five percentage points behind the Consumer Price Index that stood at 9% in April, up from 7% in March.


Latest pay award findings:

Based on the outcome of 295 pay settlements with effective dates between 1 March 2022 and 31 May 2022, covering more than 928,000 employees, XpertHR also finds:

  • Matched sample reflects upward trend: Over 80% of pay awards in a matched sample paid a higher increase to employees this year than they received last year. 11% paid the same amount as last year, and 7.1% were worth less this year.
  • Most common pay award is 3%: Almost a fifth (18.2%) of the pay deals recorded are worth exactly 3%, making it the most common award. This is followed by a 5% increase, where 9.7% of the deals in the sample are pitched.
  • Pay freezes shrink: Only 3.4% of pay reviews across the sample have resulted in a freeze, compared to 4.7% across the previous three months.


Public sector pay lags behind that of private sector

Over the 12 months to the end of May 2022, the median pay award across the public sector stands at 1.4%. While over two thirds of these pay awards are lower than employees received the year before, as more 2022 pay agreements are submitted it is expected employees will receive awards higher than those received in 2021.


In the private sector, pay awards over the past year centre on a 3% increase, double the figure recorded for the 12 months to the end of May 2021. Over 80% are worth more than employees received over the previous year. However, the real pressure on pay awards has come over the past few months, with a median 4% award recorded over the three months to the end of May 2022 compared with 3.2% during the first three months of the year.


Sheila Attwood, XpertHR pay and benefits editor, said:

“Despite pay awards reaching record levels not seen for 30 years, any marginal increases we are seeing are outstripped by the sheer pace of inflation. There are no signs that pay award levels are going to fall, meaning wage rises are likely to remain steadfastly below the rate of inflation for the foreseeable future.”

“With the threat of further inflationary pressure, businesses that are unable to match pay with inflation should consider where and how they can help employees. Other benefits and financial guidance will not only help retain top talent, but crucially it will help staff weather the worst of the cost of living crisis.”