Pay freezes set to end in 2010
Mon, 09 Nov 2009
Pay freezes are set to come to an end next year, a new study has indicated.
According to research conducted by Mercer, optimism about the economic recovery is gathering pace, meaning more employers are considering raising salaries.
In the third quarter of 2009, 76 per cent of business leaders questioned said their firm was not considering a pay freeze in 2010 – a marked improvement on the previous two quarters.
Additionally, no organisations surveyed said they were planning a promotion freeze in 2010.
Hannah Perera, a principal in Mercer's human capital business and a specialist in executive remuneration, did note that many firms may look to offer other benefits to employees aside from financial reward.
She stated: "Cash, tarnished by the role of bonuses in the economic slump, is no longer king in the eyes of employers.
"It's being usurped by an emphasis on employee engagement and a focus on motivating specific high value employees. Whether this 'new normal' approach continues when the economy gathers pace again remains to be seen."
However, Ms Perera suggested that wage rises may be needed to appease companies' top performing employees.
Last week, the Hay Group warned that firms face losing their star employees if they do not reward them financially for their efforts during the recession.
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