A forecast by XpertHR suggests that nearly half of the pay awards in 2024 are anticipated to be lower than those of the previous year, primarily due to a decline in inflation rates.
The latest data from XpertHR indicates a median basic pay award of 4 percent for 2024, marking a decrease from the previous year’s offerings.
In the three months leading up to February 2024, the median basic pay award stood at 4.8 percent, showcasing a downward trend for the second consecutive rolling quarter, hinting at the beginning of this anticipated decline.
Sheila Attwood, XpertHR’s senior content manager for data and HR insights, commented on the forecast, stating, “Our forecast indicates the value of pay awards will fall further as we head towards April, the busiest month of the year for this activity. Over the year as a whole, we forecast a median 4 percent pay award, although 5 percent is the most common prediction, suggesting a final outturn somewhere in the region of these two figures.”
Attwood further elaborated, highlighting that while pay awards are now surpassing CPI inflation, organisations are striving to retain talent by offering what they can afford, amidst declining inflation rates.
Key findings from the XpertHR pay forecast for 2024 include:
- The median pay award forecast for 2024 is 4 percent, with approximately one-fifth of forecasts predicting a 5 percent increase.
- Nearly half of the forecasted pay awards are expected to be lower than those of 2023, while only around one-fifth are expected to surpass last year’s settlements.
- Larger organisations are forecasted to offer slightly higher median pay awards compared to smaller organisations.
- The median pay award has dropped for the second consecutive rolling quarter to 4.8 percent, the lowest level seen since the rolling quarter to September 2022.
- A significant portion of pay deals are expected to be less than those offered in the previous year, with only a quarter expected to exceed last year’s settlements.
Reflecting on these findings, Sheila Attwood noted, “After historically high pay awards during 2023, that came largely off the back of the jump in inflation, we knew that employers would show more restraint in their 2024 pay reviews.”
The data for the initial deals concluded in 2024 indeed confirms this trend, with a median 4.8 percent award in the three months leading up to the end of February, indicating a cautious approach among employers in their pay review processes.
As organisations navigate through these shifts in pay awards amidst changing economic landscapes, attention remains focused on the evolving patterns in pay reviews over the coming year.
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 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.
