Pay freezes are melting away

Private sector shows signs of recovery while public sector feels the pinch of the recession

Less than one in five workers is now facing a pay freeze, according to new research from IDSPay.co.uk.

This is the lowest proportion of organisations with pay freezes since January 2009, when they emerged as a key trend during the economic downturn.

The research covers the pay of over 2.1 million employees across all industries, including high-tech sectors, such as engineering, financial and pharmaceutical.

The median pay across the whole economy, both private and public sectors, has increased from 1.9 percent in the three months to March to two percent in the three months to the end of April.

While the median pay level in the private services sector matches the overall level (up from 1.3 percent to two percent at the end of April), there is a contrasting trend in the public sector.

The median pay in the public sector is just one percent, half of that of the economy as a whole. Furthermore, 35 percent of public sector pay awards effective in April were pay freezes. The researchers found that where pay rises were awarded, they tended to be around one percent, with any higher increases being part of previously-agreed, long-term deals.

Ken Mulkearn, editor of IDS Pay Report, said: "Our latest figures present strong evidence that pay freezes - one of the key features of the recession - are now fading, in the private sector at least, as the economy stabilises.

"However, the picture in the public sector is very different, with the number of freezes rising. The number of employees affected by freezes is likely to rise as well, since the public sector bargaining groups are relatively large."

He added: "In the private sector last year, the proportion of employees covered by pay freezes was never much more than one-in-ten, since although there was a large number of freezes, most of these were at comparatively small organisations."

A recent survey by recruitment agency CVScreen found that IT salaries in the UK rose by two percent between Q1 2009 and Q1 2010.

Another report claimed that employees prefer freedom with social media websites, such as Facebook, at work over pay rises.

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