17/11/2009 - Half of firms 'plan pay freeze'
Despite signs of economic recovery half of all UK firms are planning a pay freeze, a new study has shown.
According to research by the CBI business group and recruitment firm Harvey Nash, only 4% of companies surveyed intend to give staff an inflation-busting pay rise.
The CBI's deputy director-general John Cridland said: "The worst may be over but firms remain ultra cautious about increasing pay. Market conditions continue to be very tough and growth in 2010 is going to be feeble, so pay is going to be squeezed for some time to come."
The survey gathered data from 243 organisations across the private and public sector, employing more than half a million people in total.
The organisation further said that private sector firms had "adapted to new economic realities" with flexible working and pay freezes to protect jobs.
Although unemployment has reached 2.46 million so far, this is lower than first feared as workers give ground on pay and hours to avoid even more savage cutbacks.
Mr Cridland added: "Given the alarming state of the public finances, we must see similar pay restraint in the public sector."
The research also found that almost half of respondents - 49% - think the UK is now a less attractive place to do business than it was five years ago, with half of firms cutting back on graduate recruitment.
Copyright © Press Association 2009
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