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The pay squeeze: implications for ER

Ken Mulkearn, Head of Pay & Research at IDS, discusses the implications of pay settlements in 2013 and the anticipated trends for 2014. With sector-specific pay awards indicating modest growth—e.g., manufacturing and private services both at 2.5%—and average earnings showing just 0.7% growth, Mulkearn analyzes why earnings growth lags behind pay settlements. The discussion includes insights on the impact of the living wage, public sector employment trends, and changes affecting real wages since the recession. An essential resource for employers and employees navigating the evolving labor market.

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The pay squeeze: implications for ER

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  1. The pay squeeze: implications for ER Ken Mulkearn, Head of Pay & Research, IDS Manchester Industrial Relations Society5 December 2013

  2. Pay awards in 2013 from IDSPay.co.uk

  3. Sector-by-sector outcomes 2013 Manufacturing median pay award – 2.5%; private services – 2.5%; not-for-profit organisations – 2%; public sector – 1%

  4. Average Weekly Earnings (AWE) 0.7% earnings growth across economy (September 2013) Total earnings in private sector up 1.1%, public sector flat Why is earnings growth below pay settlements? Don’t measure the same thing – AWE affected by different changes in pay and labour market to IDS pay settlements Overtime, working hours, bonuses, market adjustments and shifts in structure of workforce all affect AWE

  5. Real wages negative since pre-recession

  6. The labour market

  7. Changes in public sector employment 1992-2012

  8. Inflation outlook

  9. Business investment

  10. What might happen on the reward front in 2014?

  11. Employers’ intentions for 2014

  12. People issues

  13. The rise of the ‘Living Wage’

  14. Thank you very much – questions welcome 020 7422 4937 ken.mulkearn@thomsonreuters.com

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