A fifth of pay awards remain frozen

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Pay awards refuse to rise as employers cope with Covid challenges
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Pay freezes continue as employers cope with the ongoing challenges of the coronavirus pandemic.

According to the latest data from pay analysts XpertHR, more than a fifth (21.1%) of all pay reviews for the quarter up to the end of October 2020 led to a salary freeze. The median basic pay award across both the private and public sectors stood at 2%, it said.

XpertHR also updated its median measure for the previous quarter from 0 to 1%.

The final months of the year tend to be quiet in terms of settlement data as most employers have already concluded pay reviews, so the sample is a small one, of 51 awards.

Based on the sample, it found that there was a wide interquartile range in pay awards – with the middle half of pay deals worth between 0.6 in the lower and 2.8% in the upper.

More than half (51.4%) of the awards recorded were lower than the same group of employees received a year ago. The rest were split fairly evenly between those that stayed the same (25.7%) or higher (22.9%).

In the private sector, the median pay award recovered to 2% in the three months to the end of October 2020, from a pay freeze in the previous three rolling quarters.

However, this time last year pay awards in the sector were running at 2.5% – a level they have failed to reach in 2020. This time last year the top quarter of awards were worth 3% or more – now, this is at just 2.2%.

The 12-month pay award figure is also down on last year in the private sector. Over the 12 months to the end of October 2020, the median pay award was 2%, down from 2.5% in the year to October 2019. In the public sector, pay awards remain unchanged over the 12-month period, at 2.5%.

XpertHR pay and benefits editor Sheila Attwood said: “So far this year around one-fifth of all pay reviews have resulted in no movement in pay for employees.

“While a desire to save jobs is a focus for some, others are struggling with the funds to recognise the very employees who have kept their businesses going through the pandemic. With a second national lockdown now in place, organisations need to look out for their workforce and keep them motivated ready for when the economic recovery happens.”