Over recent years, pay settlements in the UK have been depressed. Companies have struggled to remain in operation and in order to increase their efficiency, some have been laying staff off and the workers who remain have in many cases been subject to pay freezes.
However, figures released by the Incomes Data Service (IDS) suggest the tide may be turning and private sector salaries are now going up more quickly. It found that the median pay settlement increased from 2.2 per cent to 2.8 per cent in the three months leading up to January 2011.Many of the pay awards were made in the manufacturing sector, where the median increase was 2.9 per cent.
Meanwhile, the organisation also revealed that almost half of awards made were at three per cent and above. Of these, two-thirds were increases agreed under long-term deals. Some of these agreements were linked to retail price index inflation.
In order to administer employees’ wages, many organisations in both the private and public sectors rely on payroll services provided by payroll companies. This outsourcing can lift a significant burden from them.
Editor of the IDS report Ken Mulkearn said: “Our latest figures show wage rises have picked up in manufacturing and the level of awards in private services appears to have picked up too.
“The number of awards at three per cent or above has been rising and this has emerged as a key figure in pay setting. However, pay awards are still trailing some way behind inflation. This gap looks set to continue if inflation continues to rise.”Many companies are facing pressure to up workers’ pay as prices continue to climb. If they opt to increase wages, the changes in many cases will be implemented under payroll services provided by the payroll companies they use.