Yahoo Finance Coronavirus: UK employers give lowest pay rises in 10 years
Companies in Britain’s private sector are giving staff the lowest pay rises in a decade amid the ongoing COVID-19 crisis.
Pay deals in the three months to July offered a median annual pay rise of 0.5%, down from 2.2% from the last three reports, according to human resources data provider XpertHR. Four in 10 reviews of pay have led to freezes.
“The drop in the value of pay awards comes as no surprise, as the number of pay freezes made by organisations begins to creep up. We also expect many of the pay reviews currently on hold to ultimately result in a pay freeze for staff, making 2020 the worst year for pay awards since 2009,” said XpertHR pay and benefits editor Sheila Attwood.
The spread of coronavirus has had an unprecedented impact on the UK economy, industries and jobs. So far, around 750,000 jobs have been axed in the UK since the start of the pandemic.
UK chancellor Rishi Sunak recently hinted that public sector pay awards next year will not be so generous: “In the interest of fairness we must exercise restraint in future public sector pay awards, ensuring that across this year and the spending review period, public sector pay levels retain parity with the private sector.”
The Bank of England expects the overall UK unemployment rate to nearly double to 7.5% by the end of the year.
READ MORE: Forecasts for UK economy get worse and worse
Recruitment & Employment Confederation (REC) data showed this week that employers are increasingly looking to hire temporary workers, instead of full-time, amid a rise in job losses across the country.
Analysis by the Institute for Fiscal Studies (IFS) showed that a decline in average real pay levels for high earners since the last recession hit in 2007 has affected London the most.
Xperts HR data showed on Thursday that median pay award fell two percentage points lower than the median of 2.5% recorded in the same period a year ago — the lowest figure for more than a decade.
Meanwhile pay freezes dominated the data and more than half of pay deals (56%) were lower than the same group of employees received a year ago.
