• Phone
  • Contact us
  • Locations
  • Search
  • Menu

share

  • Add this article to your LinkedIn page
  • Add this article to your Twitter feed
  • Email this article
View or print a PDF of this page
.

"The recession and recent political events have made employees much more hungry for fairness. This is something companies will need to heed for some time ahead."

JONATHON HOGG, PA EXPERT IN PEOPLE AND ORGANISATIONAL CHANGE

Over a third of UK firms freeze staff pay – perceptions of ‘fairness’ now key

More than a third of UK businesses imposed wage freezes on their employees last month, as they struggle to stay afloat during the recession, according to figures from Incomes Data Services (IDS).

Ken Mulkearn, editor of the report, explained that pay restriction as well as temporary cuts are part of many companies' strategies to avoid redundancies wherever possible.

British Airways boss Willie Walsh offered over 30,000 employees the chance to take between one week and one month of unpaid leave, or to work for the same period without pay.

Commenting on the action, he said: "Our survival depends on everyone contributing to changes that permanently remove costs from every part of the business."

As well as airlines, other key sectors that have been affected by wage freezes include the media, construction and manufacturing.

However, there are signs that pay increases are still being awarded in some areas. IDS found that, of 75 new settlements the organisation monitored, a fifth of the new deals were for between three and five per cent. It noted that pay freezes have been 'a rarity' in the finance industry so far this year.

Jonathon Hogg, an expert in people and organisational change issues at PA Consulting Group, said:

"The picture looks grim. Job cuts, pay freezes and recruitment freezes are now common place. An air of desperation has set in with employees themselves volunteering to reduce their pay or take sabbaticals.

"The good news is people are being pragmatic and solidarity appears to be strong for the moment. But how long will this mood last? Arguably this depends on people's perception of 'fairness'. Companies have to show that what they are doing is fair. There must be a convincing rationale, a fair process, fair proportionality and fair challenge. By this I mean that companies must symbolically tackle those individuals who undermine this principle of fairness, regardless of rank.

"The recession and recent political events have made employees much more hungry for fairness. This is something companies will need to heed for some time ahead."

To find out more about how PA can support organisational change in your business, please, contact us now.

By using this website, you accept the use of cookies. For more information on how to manage cookies, please read our privacy policy.

×