New data released by XpertHR reveals that 76 percent of pay awards in 2023 were higher than those in 2022, as employers sought to address the ongoing cost-of-living challenges faced by employees.
The median basic pay settlement for the whole economy in the three months to the end of December 2023 remained at 6 percent, consistent with the figure for the entire year.
In the 12 months leading up to December 2023, public-sector pay awards were 0.8 percentage points above the whole economy median.
However, as the first January pay deals come in, XpertHR anticipates a decline, with over half of 2024 deals expected to be lower than those awarded in 2023.
Sheila Attwood, XpertHR’s Senior Content Manager for Data and HR Insights, commented on the findings, stating, “With pay awards having hit their peak, and employees still dealing with the impact of the rising cost-of-living, organisations will need to find an alternative way to support staff.”
XpertHR suggests that optimising benefits packages could be one such solution. Employers are encouraged to analyse employee benefit data to identify popular options and benchmark against market trends to ensure competitiveness.
Pay Review Pattern – Whole Economy, December 2022 to December 2023
The graph illustrates a notable pay review pattern from December 2022 to December 2023, with a median pay settlement remaining at 6 percent.
Latest Rolling Quarter Findings:
- Narrower Interquartile Range: The interquartile range spans less than one percentage point, with the lower quartile at 5.2 percent and the upper quartile at 6 percent.
- Median Pay Award Unchanged: The median pay settlement remains at 6 percent, consistent with the previous rolling quarter.
- Higher Pay Awards Dominate: In a matched sample analysis, over half (54%) of the latest pay deals are worth more than the same group of employees received in 2022.
2023 End-of-Year Sector Review
2023 was marked by extraordinary developments in the job market, as XpertHR analysed 1,018 deals covering approximately 6.3 million employees.
- Public Services: Recorded the highest median pay award at 6.5 percent, half a percentage above the whole-economy median. Local government led with a 9.2% median, while central government recorded the lowest at 4.5 percent.
- Manufacturing and Production Sector: The median pay award for the year was 6 percent, with variations across industries.
- Private-Sector Services: The median pay award was 6%, with notable rises in facilities, security, and support services at 8%, and transport and storage at 7.8 percent. The lowest median award was recorded in professional and business services (5%).
- Not-for-Profit Sector: Mirrored the whole economy trend with a median pay award of 6 percent.
While 2023 witnessed historic highs in pay awards, employers now face the challenge of adapting to changing economic conditions and supporting their workforce effectively.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.