Pay freezes abandoned, but firms remain cautious says CBI

Just 14% of firms plan to operate a pay freeze compared to over 50% last spring, the CBI/Harvey Nash research found. Over 20% of the 330 employers questioned said they would offer targeted pay rises for key staff. Over 40% plan a universal below inflation rise for all workers according to the CB/Harvey Nash findings. Recruitment freezes are also on the wane according to the survey. Only 7% of firms will cease hiring activities this autumn- down from 61% last spring. Firms were looking to hire staff in areas with high growth opportunities, the CBI said. The public sector was set to bear the brunt of continuing pay and recruitment freezes , the association added. The CBI also found employee morale continued to struggle with only 38% of survey respondents reporting high levels. John Cridland CBI deputy director general said: "Firms are cautious about recruitment and pay, given the fragility of the economy. But they know they can't afford to take staff for granted, and must redouble efforts to keep employees on board as they gear up for growth." He added: "This will be especially true in the public sector which, for the first time, is facing pay and recruitment freezes to reduce the deficit."