Divide in workforce as half of firms either hike or freeze pay

Kasmira Jefford
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3pc of firms cut staff pay last year while 39pc imposed a pay freeze (Source: Getty)
Almost half of the UK workforce had their pay frozen or reduced last year while the similar proportion enjoyed a two per cent hike or more in their salary, according to figures out today that lay bare the increasing divide in the market.

The latest labour market outlook from the Chartered Institute of Personnel and Development (CIPD) shows that three per cent of firms cut staff pay last year while 39 per cent imposed a pay freeze.

In contrast, 40 per cent of companies afforded a wage increase of two per cent or more while the remaining 18 per cent received a pay increase of between 0.1 per cent and 1.99 per cent.

Labour market analyst Gerwyn Davies said the gap is often within the same sectors. For example, 54 per cent of manufacturing and production firms hiked pay while a third (35 per cent) froze salaries.

“It comes down to what businesses can afford... Our report shows a clear correlation between employers that state they have adopted a high value business strategy (as opposed to a low cost strategy) and those that were able to afford to pay a pay increase of two per cent or more,” Davies said.

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