Manufacturing pay ahead of wider economy

According to the data from EEF, the manufacturers’ organisation the average pay settlement in the six months from February to July was a healthy 2.6%. Importantly, this includes April, one of the year’s major pay rounds, which is seen as a good indicator for pay this year.

At 2.6% the figure is an increase on last year where pay settlements averaged out at 2.4%. Furthermore, pay deferments and freezes have continued to fall with the 3 month average freezes in July this year running at just 6.4% compared to 14.6% in July 2013.

The data comes on the back of last week’s data showing that earnings are struggling to recover across the wider economy. In contrast, EEF’s data suggests that manufacturers are rewarding their employees after a very difficult economic period of substantial numbers of deferments and freezes. Employers are also countering the effects of skills shortages by paying above inflation awards to retain and attract key staff.

EEF’s figures also come at a time when the industrial relations landscape is changing post-recession and, ahead of the two main negotiating periods before the General Election next year.

To help employers gain an insight into this changing scenario and, manage effective relationships with their employees, EEF’s expert team of employment relations advisers is running a conference entitled ‘Managing Employee Relations’ at five locations across the UK. Full details and how to book can be found at www.eef.org.uk/events

Jeff Neild, National Head of Employment & Industrial Relations at EEF said: "After many challenging years, manufacturers are now literally paying their employees back for their support to keep jobs and businesses going. Business across the sector has clearly been on the up but this new post-recession landscape is, however, presenting employers with a new set of challenges in managing relationships with their employees.

"Employers need to take practical steps to ensure they are fully up to speed with managing trade union dynamics in an effective way.”