Median basic pay was 6% in the three months to the end of May 2023, unchanged for the fifth consecutive rolling quarter, figures show.
Data from XpertHR shows that despite pay settlements in Britain standing strong at 6%, a level not observed since 1991, high rates of inflation mean employees are experiencing a decrease in real-terms pay.
The figures include awards from April, a key month for pay reviews between employers and workers.
It comes as UK inflation remained stuck at 8.7% in May, higher than expectations of a drop to 8.4%.
The high consumer price inflation, the fourth month in a row that price rises have exceeded forecasts, heaps further pressure on the Bank of England to keep raising interest rates.
Based on the outcome of 228 pay awards with effective dates between 1 March and 31 May 2023, covering nearly 400,000 employees, the research showed that 5% is the most common deal.
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Approximately one-quarter (24.5%) of awards were at 5%, which continues to be the value of the highest proportion of deals.
There were fewer pay freezes with just seven settlements being reported, representing only 3.1% of all deals collected in the three months to the end of May.
Only a minority of deals aligned with the living wage rate. Approximately 7% of all pay settlements reported aligning the settlements to meet the living wage rate (either national or real living wage).
The proportion of higher deals increased. Analysis of a matched sample of pay awards, where details of awards for the same employee group last year had also been provided, has found that the proportion of deals that are higher than last year is up compared to last month. For the three months to the end of May, 77.2% of deals were higher than last year’s awards.
Danni Hewson, AJ Bell head of financial analysis said the latest inflation figures suggest employers will be under more pressure to ramp up efforts to keep staff happy.
“With a tight labour market comes the pressure on employers to keep their skilled workforce happy, which is increasingly difficult as that workforce becomes even more inflation weary," he said.
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“They’ve battled through high energy costs, switched supermarkets and traded down for some of those nice to haves, but the huge numbers some homeowners are facing when they come to re-mortgaging will undoubtedly put pressure on employers to hike wages further in the coming months."
Sheila Attwood, XpertHR senior content manager, data and HR insights, said: “Despite some signs of the labour market easing, employers continue to report skills shortages and retention challenges. Pay and benefits are often used to help ease the pressures, and this is likely to be behind some of the increases we are seeing.
"We don’t expect to see any further upward movement in pay awards, although the slower rate of decline in inflation that is playing out may well leave pay awards higher than organisations had originally anticipated at this point in the year.”
The data follows news that some of the UK’s best known retailers including Marks & Spencer, WH Smith and Argos are among 200 companies collectively fined £7m for failing to pay the legal minimum wage.