Employers are keeping a tight rein on pay, but recruitment freezes are starting to thaw and some of the dramatic changes made to working patterns during the recession are now being eased.
Research by the CBI and recruitment firm Harvey Nash found that half of the 243 employers surveyed were planning to freeze pay altogether, and that only 4% plan to make an inflation-beating rise.
But the number of firms operating a recruitment freeze has dropped from 61% in the spring to 37%. This was largely due to firms unfreezing parts of their organisation, and there was far smaller drop in the number of firms who have blocked new hires across the whole business.
The survey also showed that fewer employers see the need for some of the more extreme measures required to control costs earlier in the year, such as extended shut-downs, cuts in overtime, and bringing forward holidays.
John Cridland, CBI deputy director-general, said: “The worst of the recession may be over but firms remain ultra cautious about increasing pay. Market conditions continue to be very tough and growth in 2010 will be feeble, so pay is going to be squeezed for some time to come.”
An IRS survey of pay trends found almost half of private sector employers were confident they would be able to offer staff higher pay awards in 2010 than they did this year. An increase of 2% was the pay rise cited most often.
Other CBI survey findings include:
- Some 36% of employers said they had made or were considering changes to working patterns to cope with the recession, such as cutting shifts or agency staff.
- The use of flexible working has risen, in particular teleworking, or working from home, has soared in popularity, with two-thirds of firms (66%) making use of it – 20% higher than the 46% recorded just last year.
- Half of firms said they had trimmed graduate opportunities. One-third (31%) continued to take their usual numbers and a fifth (19%) increased hiring.