Squeeze on income tightens as most workers see their pay frozen or cut

A MAJORITY of employees across all sectors saw their pay either frozen or cut last year, according to a study by the Chartered Institute of Personnel and Development (CIPD).

Nearly half, or 48 per cent, of workers had their pay frozen in 2011, while five per cent saw their remuneration reduced. Fewer than one in five employees received a cash bonus, the survey showed.

Since recession hit in 2008, the proportion of workers receiving a pay rise has collapsed from 67 per cent to 45 per cent last year.

Among employees who were granted higher pay, wages rose by a median average of 2.5 per cent, the survey revealed.

Yet among those who received a pay rise, satisfaction remained “strongly positive”, with the modest level of increases attributed to broad economic problems.

“It’s encouraging to see that employees recognise the impact the state of the economy has on their employers’ ability to reward them with pay rises and cash bonuses,” said the CIPD’s Charles Cotton.

“However, one of the main reasons cited for dissatisfaction with a pay rise was feeling that it didn’t reflect how well the individual had performed,” Cotton warned.

The survey showed that 24 per cent of those in the government sector received pay hikes in 2011, despite a pledge to freeze public sector pay. In the commercial sector and non-profit sector, 51 per cent and 45 per cent respectively saw their remuneration increase.