For the eighth time in 2023, the median pay settlement value hits 6%, finds XpertHR
The latest data from XpertHR shows that the median basic pay award in the three months ending in November 2023 was 6%. This indicates that only three rolling quarters in 2023 saw the median pay settlement dip below 6%, while all other periods remained consistent at 6%, a level not sustained for over thirty years.
Sheila Attwood, XpertHR senior content manager, data and HR insights, comments: “Over 2023 as a whole, pay awards stood at a median of 6%. The jump from 4% the previous year was a reflection of the high inflation levels in the UK, and a commitment from employers to help their employees with this as much as possible. Inflation is now falling, and we expect the level of pay awards to follow suit. However, employers have indicated that there may only be a small drop-off – our prediction for the going rate of pay awards in 2024 sits at 5%. Organisations are still keeping a close eye on inflation but also the loosening of the labour market and the health of the economy – deteriorating conditions will likely drive pay awards down in the busy January and April months.”
Latest rolling quarter findings
Based on 26 settlements representing just under half a million employees, with effective dates between September 1 and November 30, 2023 – it’s important to note that fewer deals typically take effect at the end of the year, resulting in a smaller sample size compared to previous releases, XpertHR also found that:
- Median pay award remains unchanged. The median pay settlement remains at 6%, consistent with the previous rolling quarter. In 2023, only three rolling quarters had median deals below 6%.
- The interquartile range is unchanged for the third consecutive month. The interquartile range spans two percentage points. Like the two previous rolling quarters, the lower quartile remains high at 5%, while the upper quartile stands at 7%.
- The public sector maintains higher settlements. In the 12 months to the end of November 2023, public-sector pay awards stood 0.5 percentage points above the private sector and the whole economy medians.
An unprecedented year for pay awards
As 2023 comes to a close, XpertHR has collected more than 1,000 deals to date, with the majority of pay awards this year surpassing those of the previous year. By the end of November 2023, in a matched sample, 76.1% of 2023 pay settlements had higher values compared to the prior settlements for employees.
Additionally, the median pay award across the entire economy increased by two percentage points compared to the 12 months leading up to November 2022, when it was at 4%. A significant portion of these deals were clustered around the beginning of the year. Nearly half (47.7%) of all 2023 deals came into effect in April, with one-third (32.5%) becoming effective in January. Consequently, by the end of April, the majority (87.3%) of all 2023 pay deals had been implemented.
