Changes to pay in 2013

17th March 2014

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Rebecca Garner

Results from the 2014 IEMA practitioners survey reveal that almost 60% of IEMA members taking part received a pay increase during 2013

The results of the 2013 practitioners’ survey reflected the ongoing harsh economic climate and the absence of any encouraging indicators for the labour market and pay levels in the UK. The 2014 survey, however, was carried out amid signs that the UK could at last be emerging from the recession, with unemployment falling and signs that the recovery in the UK economy is getting stronger.

In February 2014, the office for national statistics (ONS) reported that the UK’s unemployment rate was 7.2% in the three months to December 2013. Compared with a year earlier, there were 396,000 more people in work. The number of people in employment has now reached 30.15 million. There are also positive signs for growth, with the UK economy expanding by 1.9% in 2013 – the fastest recorded increase in gross domestic product since the first quarter of 2008 and the onset of recession.

The key question is whether the economic recovery and a healthier labour market are having a positive impact on pay levels. The available data indicate that it is too soon for the cheerier economic climate to feed through into higher pay rises. Looking back on 2013, pay experts at XpertHR note that the calendar year “ended on a low note in terms of pay awards”, marking “yet another year of real-term pay cuts for workers”.

The retail prices index (RPI) inflation rate stood at 2.7% in the year to December 2013, compared with a median 2% pay increase for workers across the economy. This compares with the long-running pre-recession trend for employers to award annual increases of between 3% and 3.5%. It is not hard to appreciate the cumulative effect of successive below-inflation pay rises on people’s wages and living standards.

The results of this year’s survey reveal a slight increase in the proportion of IEMA members receiving a pay rise, with almost six in 10 (58.9%) reporting that they were awarded an increase in 2013 (figure 5). This compares to 56.9% of practitioners who reported receiving a pay rise in the 2013 survey and 54.2% in the 2012 poll. These figures demonstrate a slight upwards trend in pay rises over the past three years, indicating that the remuneration levels in the environment profession are moving in the right direction.

For those IEMA members who did receive a pay award in 2013, the median annual increase in their earnings was 3%, which is higher than the 2% average increase recorded by XpertHR for all UK employees. However, the 3% pay rise for environment professionals revealed in the 2014 practitioners’ survey is lower than the 4% median increase reported in last year’s survey.

Many UK workers experienced a prolonged pay freeze during the recession, particularly in the public sector, and IEMA members have not been immune. The 2013 practitioners’ survey reported that 35.7% of respondents experienced a pay freeze, similar to the 36.1% who experienced a freeze in the 2012. This year’s survey hits a slightly more positive note, with 32% of respondents reporting that their pay stagnated in 2013. Although an improvement on the previous two years’ surveys, the findings still show that almost one-third of the IEMA membership saw no improvement in their basic income level in 2013. At least the proportion of respondents who suffered a salary decrease is small, at 7.4%.

According to ONS, real wages have been falling since 2010, the longest sustained period of declining salaries since 1964. There are several factors behind the deterioration in wages, says ONS, including the downward pressure that falling productivity may be exerting on real wages and changes in the hours that people work.

Survey respondents were also asked about changes to any extra payments they receive, such as discretionary or performance-related bonuses. Only a minority of environment professionals enjoyed an increase in their annual bonus in 2013, with just one respondent in five (21.2%) reporting a rise (figure 6). Two-thirds of practitioners (67.1%) confirm that their bonus payment in 2013 was the same as in 2012.

If the economic recovery is on a firm path, the expectation is that pay rises will start to reflect this rosier picture over the coming year. But there is no guarantee that this will happen. XpertHR’s survey of employers’ pay prospects for 2014 does not reveal much evidence for optimism, with the clear majority (61.9%) of pay settlements expected to be at the same level as last year. Private sector employers are predicting a median pay rise of 2.5% in the year to 31 August 2014. We already know that average cost-of-living awards for public sector employees will be stuck at 1% for the next year.

Read the full survey results:

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