Pay settlements remain stable at 3%

September 22, 2003

Pay settlements remain stable at 3%

In the three months to 31 August 2003, basic pay settlements have stayed focused around 3%, according to the IRS Pay Databank, covering just over 240,000 employees.

At 3%, the median or mid point in the range of basic awards is unchanged for five successive rolling quarters. This represents the longest period of settlement stability since May to November 2001.

Other key findings include:

Half of basic awards are between 2.5% and 3.4%. The upper quartile(above which the highest 25% of awards lie) is pitched at 3.4% in August.

Following revision of the July data, this is unchanged from a month earlier. Meanwhile, the lower quartile (the cut-off point for the lowest quarter of deals) is pitched at 2.5%, up from a revised 2% in July. The inter-quartile range (where the middle 50% of deals lie) is currently 0.9 percentage points.

Public sector deals continue to outstrip those in the private sector. Based on an analysis of basic settlements in the 12 months to August 2003, the median private sector deal is pitched at 3%. This compares with the public sector, where the median basic award is pitched at 3.5% for the fifth successive month.

Manufacturing and services awards remain closely matched. The 3% private sector benchmark is replicated across both manufacturing and service sector companies. The median basic award in the service sector has been pitched at 3% in each of the eight rolling quarters to August. Among manufacturers, awards have focused on 3% in each of the last five months.