Pay awards in engineering almost double as employers attempt to improve recruitment and retention
The median pay award across the engineering sector almost doubled from 2.2% in 2021 to 4.0% in 2022 according to a recent survey conducted by IDR. The most significant increases were in the aerospace, defence, and shipbuilding sub-sector. Many workers across this sub-sector have seen larger pay increases compared to the previous year’s figures, with the median here now sitting at 5.5% compared to just 2.0% in 2021.
Employees covered by collective agreements were more likely to receive higher increases than those working for organisations with no trade union bargaining. Pay awards for employees represented by unions were 1.0 percentage points higher at the median than those without union representation (4.5% and 3.5% respectively). This year’s survey found that three-fifths of pay increases were collectively bargained.
To assist employees with the rising cost of living, many organisations are also providing one-off lump sum payments. One-in-five organisations took this step, either in addition to or subsequent to any consolidated salary increases awarded under usual pay reviews. In the engineering sector, such payments have typically been worth around £1,000.
Organisations were asked about the most prominent factors behind their pay decisions for 2022, and three-fifths of respondents highlighted the labour market as a ‘major’ or ‘substantial’ influence on their pay decision.
Recruitment and retention
The rise in pay awards is partly due to recruitment and retention pressures across the sector. Almost three-quarters of employers cited recruitment issues, and over two-thirds of respondents also advised that they are struggling to retain staff. Many employers reported that professional engineers remain one of the most difficult occupational areas for recruitment and retention.
Other recruitment and retention solutions.
To ease recruitment and retention issues, many organisations have also improved their benefits packages. Most employers (83%) offer pension contributions that are above the statutory minimum. Additionally, 85% of employers offer occupational maternity pay policies that exceed the legal minimum. The study also found that around half (52%) of manufacturers offer two weeks of fully paid paternity leave.
Around three-quarters of organisations offer a bonus scheme to employees, half of which offer this benefit to all employees. This is a considerable rise compared to the findings in 2021, when three-fifths provided a bonus scheme to employees.
About the research
The survey was conducted between August and September 2022 and gained 50 responses from mostly medium and large-sized private sector firms employing nearly 337,000 employees in total. The survey details the difficulties organisations faced in light of increasing recruitment and retention difficulties, and the pay and reward packages implemented by employers to counteract the increasing pressures.
The report provides details of salary levels for various jobs across manual and white-collar engineering functions, from operator roles to team leaders and senior managers. It also covers pay increases, recruitment and retention issues, working hours, holiday entitlement, shift patterns and allowances, bonuses and pension provision. The report is available to buy from the below link or contact sales@incomesdataresearch.co.uk or on +44(0)1702 669549 for further details.