Changes to pay in 2012

25th March 2013

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Results from the 2013 IEMA practitioners survey reveal that more than half of IEMA members taking part received a pay increase in 2012

The ongoing harsh economic climate did nothing to improve the pay prospects of environment professionals, or UK workers generally, during 2012. The fact that the UK slipped back into recession at the beginning of 2012 is likely to have damaged the confidence of employers in their ability to plan generous pay awards.

As pay analysts at XpertHR note in their review of pay trends for 2012, pay awards sat at below pre-recession levels throughout the year. XpertHR finds that pay rises over the 12 months to 31 August 2012 were worth a median 2.5% and were dominated by increases that fell below the rate of inflation – as measured by the retail price index (RPI) – and that this has been the case since December 2009.

Inflation placed a strong upwards pressure on pay awards throughout this period but, despite this influence, the UK workforce has continued to suffer a rise in the cost of living as pay rises have typically lagged behind the retail price index (RPI). At the start of 2012, the RPI was 3.9%. By December 2012 it was down slightly, to 3.1% – still significantly higher that the 2.5% average pay increase reported by XpertHR for the UK economy as a whole.

More than half (56.9%) of IEMA members taking part in the 2013 survey received a pay increase in 2012, a slight increase on the 54.2% of respondents who reported an uplift to pay in the 2012 practitioners’ poll.

For those IEMA members who did receive a pay award in 2012, the median increase to earnings was 4%, considerably more than the 2.5% recorded by XpertHR.

The 4% median salary increase for environment professionals recorded by the 2013 survey is also notably higher than the 1.4% increase in median gross annual earnings recorded for full-time employees in the 2012 ASHE.

The level of increase also means that, unlike many other workers in the UK, a significant proportion of environment professionals did not experience a fall in their living standards during the year as their pay at least maintained parity with the recorded rise in the cost of living.

Just 5.9% of IEMA members responding to the survey reported a pay cut in 2012 – see figure 7 for details.

Pay freezes have been a common feature of the pay landscape since the onset of recession in 2007–08, and the 2013 survey shows that a significant minority of IEMA members continued to experience no increase in pay during 2012. More than one-third (35.7%) reported a pay freeze in 2012, marginally less than the 36.1% of IEMA members who reported no change in their salary for 2011.

Although the respondents taking part in the 2012 and 2013 surveys do not form a matched sample, the findings still indicate that many employers continued to impose pay freezes in 2012 as a means to help offset the difficult economic circumstances in which they were operating.

Survey respondents were also asked about changes to any extra payments they receive, such as discretionary or performance-related bonuses. As figure 8 shows, nearly seven members in 10 (69.5%) reported that bonus payments stagnated in 2012 compared with 2011, while fewer than one in five (18.3%) reported an increase; one in 10 (10.5%) reported a decrease.

The pay outlook for 2013 remains uncertain, with the possibility of a “triple dip” recession domestically and continuing difficulties in the eurozone. Several research sources also point to a gloomy pay bargaining environment over the next 12 months.

The latest pay projections from the main HR body, the Chartered Institute of Personnel and Development (CIPD), which were published in February, reveal that pay settlements are expected to remain modest in 2013. Excluding bonuses, the average pay award forecast by employers who expect to have a pay review in the coming year is 1.8%, compared with 1.7% three months earlier, reports the CIPD.

The 1.8% forecast is the highest predicted increase in pay since spring 2009. The overall forecast masks differences across the economy, with private sector employers predicting a 2.2% uplift to wages, though that is down from the 2.6% rise predicted in October 2012. Average basic increases in the public and voluntary sectors in 2013 are expected to be 0.8% and 1.5% respectively.

Separate research by the CIPD into attitudes about pay finds that employees’ confidence in receiving an annual uplift to their pay is falling. In 2009, 67% of employees predicted they would receive a pay rise in next year but, by 2012, this confidence had dropped to 55%. In general, as the economic uncertainty has continued, employees seem more resigned to the fact that their pay will not change, says the HR body.

Read the full 2013 pracitioner survey results:

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