January pay deals are freezing, research shows

One in six January pay settlements amount to pay freezes, according to the Labour Research Department (LRD) Payline database.

Out of 73 settlements that have come into effect on or after 1 January 2009, 12 – or one in six – are pay freezes either for the entire 2009 pay round or to be reviewed later in the year.

The survey of union representatives by the independent LRD, showed the number for January alone is 50% higher than the eight pay freezes posted to Payline in the whole of 2008.

Most of the freezes have occurred in the media sector, particularly local newspapers and books. Others are in manufacturing, chemicals and finance.

Today, Virgin Atlantic said it had introduced a pay freeze for all staff to come into force during March.

The research found there was some movement in the levels of pay settlements overall.

The mid-point increase in settlements is still 3.5%, while one in seven deals in January were for increases of 5% or more. The most popular settlement, awarded in a quarter of cases, fell into the 4%-4.99% bracket.

Widespread recruitment freezes are expected in 2009 as the recession continues to bite, a human capital consulting firm has warned.

In December, Watson Wyatt forecast financial services companies will stop hiring and restructure to cope with the tough financial climate, but were less likely to introduce pay freezes.

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