The latest Brightmine data reveals a stable pay award figure amid economic changes.
- Median basic pay award remained at 4.9% in the quarter ending June 2024.
- Inflation target reached, suggesting future pay adjustments are likely.
- New government proposals could lead to changes in pay structures.
- Majority of pay settlements recorded between 4% and 5%.
According to the most recent analysis by Brightmine, a renowned HR data and insights provider, the median basic pay award for the three months concluding in June 2024 sustained a rate of 4.9%. This consistency follows the revised figure from the preceding quarter, reflecting a period of relative economic stability.
In May, the Bank of England successfully achieved its inflation target of 2%, a noteworthy decline from the peak of 11.1% seen in October 2022. Analysts at Brightmine predict that, given these economic indicators, there will be a regulated decrease in pay settlement levels moving into 2025. Such predictions underscore the intricate relationship between inflation rates and wage modifications.
The political climate has also influenced expectations, as the new Labour government’s propositions involve adjusting the Low Pay Commission’s focus to incorporate the cost of living alongside median wages and economic conditions. Additionally, the proposed elimination of age-based minimum wage distinctions for adults suggests that organisations might encounter increased financial obligations necessitating considerable adjustments to existing employee remuneration.
A comment from Sheila Attwood, Brightmine’s senior content manager for data and HR insights, highlighted that the overarching trend indicates a consolidation of pay awards. She noted: “Our headline measures indicate broad stability of pay awards and we can expect this pattern to persist throughout the year. Settlements are more tightly bunched compared to this time last year, with fewer exceptionally high pay awards being observed.” This insight suggests an anticipated uniformity in compensatory practices.
In the last rolling quarter, findings based on 145 pay settlements impacting 370,339 employees showed that approximately 47.3% of these settlements ranged between 4% and 5%, with a 4% award being most prevalent. However, a notable 16.3% of agreements resulted in increases surpassing 7%, primarily affecting those earning the national living wage, who experienced a substantial 9.8% rise in April 2024.
Continued economic adjustments and government policy proposals may lead to significant changes in employee compensation structures.
