PAYnotes on 2015 pay reviews…the story so far

Image: CC_Flickr_stephen_boisvert_bullring_backyard

As we move into March I thought it would be useful to analyse what employers are paying for their 2015 pay settlements. 

What our customers are telling us

Looking at our customers, we have already received numerous updated payroll downloads from survey participants who have January reviews and we have also asked employers with April pay reviews if they have already set their pay budget. 

Collating this information makes interesting reading, particularly in light of David Cameron’s recent comments, appealing for employers to pay their people higher settlements this year. Across all industries I would say that employers have not yet heeded our Prime Minister’s plea. 

From our market database, our figures show that 2015 reviews have largely fallen within the range two to three per cent, comparable with the last two or three years’ figures. However, those employers who are not paying any increase are still in a very small minority, just one to two per cent.

As with last year, there are industry trends. Construction and house building are paying between three and four per cent, reflecting the increased recruitment and retention issues they are facing across skilled roles. 

Associations and institutes marginally lag behind the overall figures, with many paying between 1.5 per cent and 2.5 per cent. However, those located in London are generally paying more as they too face increased recruitment and retention pressures, as well as their employees having to swallow above-inflationary travel cost increases. 

Speaking of inflation, it is interesting to view the lack of movement on settlements in the context of the recent inflationary figures (see our latest PAYstats) and the lowering of bank interest rates. With both the current situation in pay settlement figures and the prospect of deflation occurring over the coming months, employees are seeing an increase in their disposable income. Perhaps employers are using this situation to their advantage?

Indeed, with the exception of Construction and house building, most of our customers say they are only experiencing recruitment and retention pressures in small pockets of key skills areas such as IT and digital media.

We will continue to track both pay settlements and overall trends in labour turnover over the course of 2015, largely through our UK Reward Survey – the spring edition of which launches in the next few weeks. As always, please do contribute to this worthwhile free survey and please get in touch if you would like an update on where things stand.

By Tim Kellett