Pay deals in the finance sector have plummeted to record lows this year despite signs of recovery, XpertHR research reveals.
Wage freezes accounted for almost one-third (32%) of all finance sector pay awards throughout the year to May 2010, according to an XpertHR report. This was up from the previous year, when a quarter of pay deals froze salaries.
The report examined 90 pay deals settled during the 12 months to 31 May 2010, and covered 170,292 employees.
It found that for pay deals where a performance-based pay rise was given, the average paybill increase was 2.3%, down from 3.5% the previous year. The median basic settlement was a pay freeze. This compares to 1% for basic deals across the whole economy over the same period and is down from 2% in the year to May 2009.
Other findings showed that employees in the banking sector fared slightly better than those in the insurance sector, with performance-based deals worth an average 2.5% at banks compared to 2% at insurance firms.
Basic pay deals were also lower, at a median 1.25% for the banks compared to 0.5% for insurance firms.
Sarah Welfare, XpertHR pay and benefits editor, said: “The finance sector has seen pay deals sink lower than in the economy as a whole over the past year.
“It is unlikely that we will see finance pay deals bounce back much over the rest of 2010, with economic uncertainty and concerns over regulation of finance sector reward dominating the outlook.”