Pay rise deferment at 7 year high
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The extent of the squeeze on manufacturing companies created by the economic downturn is now clear, with the number of companies deferring their settlement or, freezing pay, having risen sharply to nearly 1 in 4 of all settlements in the last three months.
According to figures from EEF, the manufacturers’ organisation, the latest pay data, for the three months to end of October, shows nearly 12% of companies reporting that they had deferred their pay settlement, the highest level since November 2001. Nearly 13% of them had frozen pay, the highest level since December 2003.
This has resulted in the average level of pay settlement falling sharply to 2.8% for the three months to the end of October, down from 3.1% for the three months to the end of September. After a prolonged period when settlements have remained just above 3%, this was the lowest figure reported since June 2006.
EEF Head of Employment Policy David Yeandle (pictured) said the severity of the changes over such a short period of time indicated the extent to which companies had to take immediate action to control their costs. “It seems hard to believe it is only a few months since fears about wage inflation were so prevalent,” he added.
