One third of pay deals 3% or more but 20% of workers face a freeze

One third of pay awards this year have been for more than a 3% increase, as some private sector employers buck the trend to freeze wages, research has shown.

The latest figures from research organisation Income Data Services found that one in three pay awards so far this year have been between 3% and 4%, while barely one fifth of awards have been pay freezes.

The research also showed the median pay settlement remained strong at 3% in the three months to the end of March, although lower than the 3.4% for the previous quarter to the end of February.

Ken Mulkearn, editor of the IDS Pay Report, said most of the pay freezes concentrated in engineering chemicals manufacturers, while other sectors, like food manufacturing, pharmaceuticals and retail, had seen fewer freezes.

Mulkearn highlighted pay deals by BAE Systems Submarines (a 4% pay increase from April), Waitrose (3.1% from April), First ScotRail (3% from April), and the former HBOS (4.25% from May).

But more employers have looked to freeze wages as the year wears on. The initial analysis of awards for April showed pay freezes had risen to one third.

The report said employers were also finding alternatives to implementing company-wide pay freezes. Some were freezing pay only for higher-paid groups. The BBC chose to freeze pay for its 400 executives in March, but the remainder of its staff were told to expect a “modest” rise for 2009.

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