Many companies still opting for pay freezes

Pay freezes continue to be a key part of the bargaining scene, with around four in 10 (42.9%) settlements not awarding employees any pay increase, according to figures published today by XpertHR.

The median basic pay settlement was 1% in the three months to the end of August 2010. This is set against retail prices index inflation of 4.7%.

The figures also show mixed fortunes for employees: while 40% of pay awards are higher than the award the same group of employees received a year ago, 37% are lower.

Employees receiving a pay rise based on performance fared better in the past few months, with the median increase for merit awards standing at 3%.

Shelia Attwood, XpertHR pay and benefits editor, said: “Pay settlements remain subdued, with a significant number of employers still not feeling confident enough to offer any pay increase to their employees.

“But those employers that have kept pay frozen for the past two years may struggle to maintain good employee relations if they don’t offer a pay rise in 2011.”

The findings are based on details of 49 pay awards effective in the three months to the end of August 2010. Collectively they cover more than 790,000 employees.

Further information on inflation and earning statistics can be found on the XpertHR website.

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