“Employers are also providing additional cost-of-living payments to help support employees at a time when inflation is higher than it has been. These one-off sums are not reflected in our figures for basic percentage pay awards” commented Zoe Woolacott from IDR.
Pay rises higher in private services than in rest of private sector
Firms in private services are making some of the highest awards across the economy, particularly those in financial services and retail. Nearly four-fifths of awards in these sectors are worth 5% or more this year and the potential for much higher increases is great, as many lower-paying employers will have to respond to the National Living Wage rising by 9.7% to £10.42 on 1 April 2023.
“The large uplifts in pay that we observed last year have become more commonplace in 2023, with many employers responding to the twin upward pressures of high inflation and recruitment and retention issues” commented Woolacott.
High-end pay awards are also predominant among manufacturing and production firms where more than two-thirds (67%) of awards in this area are worth 4% or more. Instances of such increases are occurring in many parts of the sector including energy and water, engineering and food manufacturing.
The latest pay settlement figures are based on a sample of 85 awards effective between 1 January and 31 July 2023, mostly at large organisations and together covering over half a million employees. Very few awards in the sample are from the public sector and therefore the results predominantly reflect the picture in the private sector.
Note for Editors
Incomes Data Research monitors pay reviews across the economy throughout the year and publishes findings in ‘Pay Climate’, our quarterly e-bulletin, with additional monthly updates on our website: https://www.incomesdataresearch.co.uk.
Our data is used by all those concerned with decisions on pay, including employers in the private and public sectors, government bodies, trade unions and economists. We have conducted research for a wide range of clients including the Low Pay Commission and Office of Manpower Economics, as well as for a range of employers and employee representative organisations
For any queries relating to this research please contact Zoe Woolacott on 01702 669549 or at zoewoolacott@incomesdataresearch.co.uk or Ken Mulkearn on 07392 018997 or at kenmulkearn@incomesdataresearch.co.uk.
