Forecasts for pay awards in 2023

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In early 2023 pay awards reached a 32-year high on the back of a tight labour market and cost-of-living crisis. Our latest survey looks at how organisations are planning to compensate their workforce this year.

The past year has seen pay rises that many of us have not witnessed before in our working lives – and in the last couple of months, rates have moved even higher. In the year to the end of December 2022, the median basic pay rise stood at 4%. But on the more responsive three-month measure, pay awards reached a 5% median in the three months to the end of December 2022 before rising to 6% early in 2023.

But will this 32-year high be maintained? Our latest pay survey gathered data from 266 organisations on pay awards and forecasts for 2023. We investigate what is driving the level of increases, including external factors such as the national minimum wage regime.