Get smart on pay freezes, UK businesses advised

Date: 24th August 2009

Businesses looking to administrate a pay freeze to staff should make people of all seniorities share in the scheme, Workwise UK said today.

The not-for-profit organisation pointed out that, in order to work best, salary restrictions should be put in place "from the chief executive down".

Pressure on pay has been brought to bear by the economic downturn, which has eaten into corporate profits among small and large firms alike.

Commonly, pay freezes are brought in as an alternative to staff redundancies.

Recent figures from the Industrial Relations Services revealed that median basic pay rose by one per cent over the three months in July.
Just over four in ten pay deals were also found to have been frozen.

Workwise UK said: "If [a company is] going for a pay freeze, it depends on the size and type of organisation. It needs to be demonstrated that it is right the way across the board, from the chief executive down.

"That is common sense really. If you want to ensure you have got good employee relations."

Latest official unemployment figures, covering the three months to June, show that the jobless total in the UK has risen to over 2.4 million.