'The differential' | How are reward & payroll teams coping with the squeeze on pay?

Recent data strongly suggests UK pay awards are tilting towards restraint, as reward teams find themselves under immense pressure to deliver future-proofed employee value propositions. 

While Brightmine data indicates current pay awards remain resilient at a median of 3.2%, matched sample analysis of 3.2 million employees shows 42.3% of settlements were lower from 1 March 2026 to 31 May 2026, than the same period last year. 

Sheila Atwood, Senior Content Manager, Data and HR Insights, Brightmine, contextualised the data: "Pay awards have been elevated for a couple years, starting in 2023 off the back of sky-high inflation since Autumn 2022. There was a lag effect so [pay awards] still high in 2024. 

"What we're looking at now is low economic growth at 1%, inflation which is due to come down next year, and a labour market which is incredibly loose...that pressure on pay awards and salary rises is much less prevalent."