Cautious Pay Rises, If Any, Expected By UK Employers

The CBI/Harvey Nash employment trends survey 2010 has shown that after months of employers standing strong with pay freezes and alterations to working patterns are unsurprisingly still facing the challenge of controlling their labour costs.

Thus we are still seeing many employers taking a very cautious approach to pay, the recently released Confederation of British Industry (CBI) report showed only 3% of private sector employers planning to make an above inflation pay awarded to staff.

On a more positive note 29% are planning to award a pay increase in line with the Retail Price Index whilst a further 20% are looking to provide pay increases although expect them to be lower than RPI. It seems many employers may be turning a corner, seeing light at the end of the tunnel, the report showed the number of employers planning to freeze their next pay review dropping from 47% six months ago to 16%.

This thought was further backed by a statement from John Cridland of the CBI expressing his opinion that many employers are starting to feel as though they have come out the other side of the recession and have managed through these tricky times to keep many more people in jobs than had been expected.

Many feel it has been largely down to the flexibility and understanding of staff who were quick to adapt during these difficult times which for many included pay and recruitment freezes. The employer-employee relationship was tested and in most cases made stronger, two-way communication played a key role in working together to ensure the organisation could reach the light at the end of the tunnel.

With so much recent change it is no surprise that many business leaders are still throwing caution to the wind, with a fragile european economy and a new coalition government who could blame them. Although there are signs that the job market is picking up a good number of businesses are still operating a pay freeze, with those who can afford to reward their staff planning the most modest of pay rises.