According to a recent report by think-tank ‘TEAM’ one of the most damaging and far-reaching aspects of the credit-crunch, has been the number of employers implementing a ‘pay freeze’ policy.
The report found that over 32% of small businesses in the UK had frozen the pay of some or all of their employees. According to TEAM, ‘ pay freezes’ are a short-term cost cutting strategy and if a workforce is to remain satisfied and productive, they must be told when the strategy will be terminated.
The survey also found that while many small businesses had implemented pay freezes over 50% of those businesses are planning to increase the amount of money they spend on wages throughout 2010.
Human resource consultant Mark Jeffries, comments: “It is vital that companies implementing a ‘pay freeze’ policy’ do so correctly. I welcome the findings of this report, which seems to indicate that businesses who have implemented pay freezes during the downturn are planning to terminate this policy as soon as possible. I would advise all companies to focus on rewarding staff again, as the economy continues to recover.”