The latest data from XpertHR reveals that basic pay awards have remained unchanged at 6 percent for three consecutive rolling quarters, covering the three months leading up to April 2023.
This period coincides with April, which holds significant importance in the pay settlements calendar as employers establish the groundwork for the new financial year.
Steadfast at 6%: no change in median basic pay award
XpertHR’s analysis shows that the median basic pay award for the three months ending in April 2023 remained at 6 percent, demonstrating stability for the third consecutive rolling quarter. As the financial year begins in April, this month becomes the busiest time for pay reviews. The current pay awards of 6 percent represent a two-percentage-point increase from the 4 percent recorded during the same period last year.
Lack of comfort for employees: real terms pay cuts persist
Unfortunately, despite the consistent pay awards, employees continue to experience substantial real-terms pay cuts when their salary increases are weighed against inflation. This realization brings little comfort to the workforce affected by these circumstances.
Rolling quarter findings: key highlights on pay awards
Based on the outcomes of 197 pay awards affecting nearly half a million employees, effective between February 1st and April 30th, 2023, XpertHR’s research further uncovers the following trends:
Largest Proportion at 5 percent: Among the recorded deals, the most common pay award percentage was 5 percent, accounting for 23.2 percent of the analyzed cases.
Widening Interquartile Range: While the lower quartile remained at 5 percent for the second consecutive rolling quarter, the upper quartile saw a slight increase of 0.1 percentage points, reaching 8.1 percent.
Decline in Higher Deals: In the three months leading up to the end of March 2023, 78.4 percent of deals received a higher increase compared to the previous year. However, during the latest quarter, this proportion decreased to 72.3 percent. Additionally, a similar portion of deals was either worth less (14.9%) or remained the same (12.8%) as the previous year.
A Few Instances of Pay Freezes: A small subset of employee groups, comprising just 3 percent of the sampled deals, experienced pay freezes.
Sheila Attwood, XpertHR senior content manager, data and HR insights, comments on pay awards:
“This latest dataset is significant because it includes the first wage reviews from April, which is the most important month in the annual pay settlement calendar. However, pay awards have remained the same, holding at 6 percent as we enter the second quarter of 2023.
“While inflation is forecast to fall through the second half of this year, our research suggests pay awards may well hold at their current levels. During a recent webinar*, we asked employers how they expected 2024 pay awards to compare to current levels – nearly half (44%) believe they will remain the same, compared to 41 percent who think it will be lower. Just 14 percent believe it will be higher.”
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.
