Wages see biggest increase for over a decade, according to XpertHR

The latest data from XpertHR shows that the median basic pay increase is worth 3% in the three months to end of January 2022. This represents a strong increase from the previous rolling quarter, where it stood at 2%. Pay awards are now at the highest level since December 2008, when the headline award was at 3.6 %.

Latest pay award findings:

Based on the outcome of 101 pay settlements with effective dates between 1 November 2021 and 31 January 2022, covering more than 171,000 employees; XpertHR also finds the following:

• Interquartile range rises. The lower quartile (at or below which the bottom quarter of deals lies) has moved up to 2.5%, from the revised figure of 1.3% in the three months to the end of December 2021. The upper quartile (at or above which the top quarter of deals lies) has risen to 4.1% from the 3% level seen in the previous rolling quarter.
• Four in five pay awards are higher. Among a matched sample of 75 pay awards (both across-the-board and performance based), 82.7% are higher than received the previous year. Around one in eight (13.3%) are the same, while just 4% are lower.

• Pay freezes continue to thaw. Just 6.9% of employees in the overall sample have seen pay frozen. In the same period a year ago pay freezes accounted for one-third of awards.

Pay awards data in this quarter does not take into account public sector data as review dates are concentrated in the middle of the year. In contrast, a significant portion of private sector review dates fall in January.

Sheila Attwood, XpertHR pay and benefits editor, said:

“The dramatic rise in the median basic pay award is direct evidence of the inflationary pressures on both employers and their employees. Against the advice of Andrew Bailey, the Governor of the Bank of England, employers have sought to protect employees from bearing the brunt of a cost living crisis that is expected to last until 2023. In doing so, our measure of pay awards is at its highest level since December 2008, but still lags behind retail prices index inflation by 1.8 percentage points, as it has done in each rolling quarter since December 2020.

“The Bank of England now expects CPI inflation to peak at 7.25% in April 2022. This is higher than predicted in its November 2021 report, which means further increases in pay awards are almost a certainty. It is hoped that any pay increases will help ease the burden of the cost-of-living crisis which is expected to worsen as the year progresses.”