More and more firms are keeping wages on hold

More and more firms are keeping wages on hold
Tuesday, 19 May 2009 17:16

A third of businesses in a recent survey froze their wages in April. Incomes Data Services (IDS) recently commented that more and more firms were holding wages at current levels. Over the first 3 months of the year, pay freezes accounted for 20 per cent of wage deals. Now that figure has risen to one third.

When increases were agreed in April, the increase was an average of 2 per cent, which itself is down from the 3 per cent recorded in the first quarter.

Looking back at 2008 the contrast is even more startling. IDS said that the 64 frozen pay settlements identified this year, compares to only 7 for the whole of 2008.

However, the IDS report pointed out that pay settlements are not following a regular pattern, with some sectors performing better. Some 40 per cent of wage rises were between 3 per cent and 4 per cent.

Ken Mulkearn, the editor of the IDS report, said: “Firms most affected by the recession are freezing or pausing pay, with most of the freezes concentrated in engineering and among firms which provide key industrial inputs, such as chemicals manufacturers.

“This difference in levels of pay settlements illustrates that there are clear sectoral differences when evaluating the effects of the recession.”

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