Average regular pay excluding bonuses in Great Britain increased by 2.9% between May to July 2018, up from 2.7% in the three months to June 2018, according to the latest UK labour market bulletin from the Office of National Statistics (ONS).
This pay growth rate has outstripped inflation, which stood at 2.4%. The growth rate for total pay including bonuses in the same period was 2.6%, up from 2.4% in the three months to June.
The weekly rate of average regular pay excluding bonuses for employees in Great Britain stood at £489 per week in July 2018.
The figure, not adjusted for inflation and calculated before tax and other deductions from pay, represents a rise from £475 for the same period of 2017.
Average total pay, including bonuses, was £520 per week, up from £504 for a year earlier. This is an increase of 38.2% since January 2005, when average total pay for UK employees was £376 per week.
Between May to July 2017 and May to July 2018, regular pay for employees in real terms, namely, adjusted for consumer price inflation, increased by 0.5% and total pay increased by 0.2%.
Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development, said: “The increasing challenge that employers face in accessing the labour and skills they need is only translating into very modest pay growth for most workers, with real pay near flatlining over the last 12 months. Until we see sustainable improvements in productivity growth this picture is unlikely to change.”
Phil Coulter, EMEA head of technology at Korn Ferry, added: “The truth is, not all businesses are in the financial position to offer substantial monetary awards to their staff, regardless of their desires. The good news is that, for the most part, employees’ expectations have begun to shift. For today’s workforce, money is not necessarily the most effective way of engaging staff with their role, and it needn’t be the most effective way to reward them, either.
“In order to keep abreast of changing expectations, organisations must ensure that they have the pulling power to attract the best. From flexible working schemes for a better work-life balance and increased holiday allowance, to robust career development programmes and creative working environments, employers need to communicate the benefits associated with their brand.”