One in three UK firms has imposed a pay freeze on its workers

According to research published by Incomes Data Services (IDS), one in three UK firms has imposed a pay freeze on its workers this year.

The areas in which pay freezes are most common are the motor industry, construction, chemicals, road and air transport and the media. Employees in energy, pharmaceuticals, bus and rail transport, food production and finance are more likely to have been awarded pay awards this year. If you’re one of the lucky ones to have received a pay increase, on average you will have received 2.9%

The report states that “In many cases pay freezes have been justified through commitments to safeguard jobs. Firms are conscious of the need to retain a skilled workforce for when the market picks up”

If inflation rises as economists predict, IDS say that there will be an upward pressure on pay, with most private sector increases in the 2.5% to 3% range. The report also warns that unemployment may remain high but if the economy recovers, skills shortages will soon re-emerge.

As ever, a few further questions for discussion on HR Case Studies: One in three UK firms imposing pay freeze where you’ll also find a number of articles on other measures that organisations have implemented to keep wages down without resorting to making staff redundant