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Pay freeze in public sector set to continue despite growth in private sector

The number of pay freezes in private sector companies is at its lowest point since the start of last year, although a fifth of employers are continuing to push through pay freezes, the Income Data Services (IDS) Pay Report revealed.

But for public sector workers, it is a different story as they will be subjected to continued pay freezes over the coming months. Public sector pay deals averaged just 1% in the three months to April which is half the 2% in the economy as a whole.

However, in a markedly different situation to last year only 18 per cent of pay deals struck by businesses between February and April were freezes, down from 34 per cent in the three months to March. The figures indicated a significant shift between levels seen in July last year, when nearly half of employers froze pay.

The IDS report said: ‘This is the lowest proportion of pay freezes since January 2009, when freezes first emerged as a key trend in pay setting during the economic downturn.’

The research covering a total of 2.1 million employees revealed a growth of 2% in the average pay award. The median pay award remains at 1% and pay freezes account for a third of pay deals analysed within the survey.

Typical pay awards in the private sector, rose from 1.3% in the first quarter of this year to 2% in the three months from February to April.

01/06/2010