New agreements for rising pay point to end of wage squeeze
NEW PAY awards to employees started to rise at the end of 2013, according to an analysis of 115 major settlements, indicating that real pay may now be rising after years of decline.
Human resources firm XpertHR say that the average settlement in the deals, which cover nearly a quarter of a million workers, increased pay by 2.4 per cent in the last three months of 2013. In December, inflation finally fell back to target, at two per cent for the first time since 2009. It has since dropped to 1.9 per cent.
In comparison, awards rose by around two per cent through most of 2013, when inflation was above the Bank of England’s target level.
XpertHR stressed that the pay increases are not yet the norm across the board: around one in eight settlements were still frozen during the quarter, and less than 25 per cent of increases were above three per cent.
“Employees will be looking for a sustained increase in pay awards after several years of no, or low, increases, but many employers are likely to still be waiting for signs of sustained economic growth,” said XpertHR’s Sheila Attwood.
Henderson economist Simon Ward has also suggested that real pay is now on the rise, as a measure of regular earnings and a 12-month average of bonus payments reached 2.1 per cent in December, narrowly ahead of inflation. The measure has not previously indicated rising real pay since the middle of 2008.