What pay data really matters? Getting under the lid of data insights

Having access to compensation and pay data is useless without the tools or skills to interpret the numbers strategically.

In the complex and emotive world of remuneration, organisations are awash with numbers, but not all pay data is equally useful. Real value lies in identifying the metrics that drive decisions, create fairness, and enable sustainable strategy.

Decide on the right data

Too much data can cloud judgement. What really matters are the indicators that influence business decisions: median base salary, pay by job level and function, pay progression, bonuses, and pay awards.

Companies typically start by aligning pay data with their strategic priorities, whether that’s talent attraction, retention, or cost control. This involves engaging key stakeholders across HR, Finance and Leadership to identify which metrics best align with the desired priorities; such metrics being performance measures, fairness and future workforce needs.

Context is key

Remember raw numbers very rarely tell the full story. To interpret pay data usefully, you need to overlay context: industry or sector, region, inflation and cost of living, role shortages and regulatory changes, for example changes to the minimum wage or national living wage.

According to the ONS, average weekly earnings for full-time UK employees in July 2025 were estimated at £727 for total earnings and £680 for regular earnings. Nominal earnings grew by 4.7-4.8% over the year, but when adjusted for inflation, real growth was significantly lower, just 0.5-0.7% depending on the inflation measure used. This continues to highlight how headline pay figures can mask the true impact of inflation on take-home income.

Prioritise internal equity

It’s not enough to be competitive externally - employees also care whether the pay structures inside their organisations are fair. Internal equity helps build trust, retention, engagement, and avoids legal or reputational risk.

The Living Wage Foundation points to the fact that low pay disproportionately affects women, citing 18.7% of jobs held by women in 2024 being low paid (below the Living Wage) compared with 12.6% of jobs held by men. Companies seen to be mindful of this will keep more workers onside.

Examine trends

Snapshots are useful, but trends tell real stories. Tracking pay changes over time reveals compression, promotion dynamics, stagnation, or escalation.

Again, according to the ONS although nominal pay growth remains relatively high at 4.7-4.8% (including/excluding bonuses), real wage growth after inflation is much smaller at around 1%. Taking these and other trends into account can help predict risk areas before they become crises.

Go above and beyond with data around pay equity

Regulatory pressures, worker expectation and reputational risk mean it’s no longer optional, but essential to act on a lack of transparency and equity.

The UK’s gender pay gap remains an issue. According to ONS, in April 2024 full-time median hourly earnings for women were £17.88 against £19.24 for men, giving a full-time gender pay gap of 7% but taken more broadly across all employees (both full-time and part-time) the gap is far wider at 13.1%.

Gender pay gap reporting is well established for large employers, but companies need to do more to address gaps in data, particularly looking at new government requirements around ethnicity and disability reporting. We need to analyse these pay gaps, not only for compliance but to devise action plans for change.

Pay is more than a cost to the business

Viewed strategically, pay is a lever: it can drive morale, retention and performance, attract hard-to-find skill sets and underpin long-term workforce planning.

Firms facing skill shortages, for example in technology or healthcare, may need to boost pay or design roles differently to retain or recruit talent. Failing to invest in this insight can lead to hidden costs in turnover and lost productivity.

Organisations who ignore pay gaps, or fail to address the need for more transparent data around pay, may face reputational damage or even legal action, which ultimately affects the bottom line.

Summary

In summary, to derive maximum value from pay data, carefully consider the following:

Select metrics that align with your strategy, not just what is easy to report
Treat pay data as a strategic investment, not a cost management exercise
Always add context: inflation, regional/industry differences, regulatory changes
Focus on internal fairness and equity and set targets beyond compliance
Track trends, not one-offs

By operating in a data-informed way, we can build compensation systems that are fair, competitive, transparent and aligned with long-term success.