Cost of living | Highest pay rises in years 'still below inflation'

Pay rises are at their highest in a decade – but still fall a long way short of inflation, new research has found.

Data from HR solutions provider XPertHR shows that the median pay rise for the three months to the end of February 2022 was 3%, a number that remains unchanged from the last rolling quarter. However, with inflation now expected to hit 7% in April and possibly exceed 8% in the next few months, a pay rise of 3% is less than half what would be needed to make up the shortfall – and staff will feel the squeeze on their pay packets.

The research by XpertHR shows that employers are, on the whole, going the extra mile to attract and retain employees – as one might expect in a tight labour market where businesses are all competing for talent. The HR solutions provider surveyed more than 268,000 employees and found that pay rises have increased significantly since this time last year (when the median pay rise was just 1%) and that higher earners have received a bigger boost (4.8%) to their pay packet than lower earners (2.5%).

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Pay freezes are also few and far between – the XpertHR research found that just 3.5% of the employees surveyed had received no pay rise over the last 12 months, as opposed to 34% this time last year.