BCC hails 'pragmatic approach' to pay
Jan 10 2011
Some 49 per cent of small and medium-sized enterprises (SMEs) will freeze pay in 2011, according to a survey of 450 businesses by the British Chambers of Commerce (BCC).
A further 6 per cent plan to reduce wages, meaning less than half of SMEs will give staff a pay rise, despite year-on-year retail price inflation reaching 4.7 per cent in November.
Dr Adam Marshall, director of policy and external affairs at the BCC, says businesses are adopting a ‘pragmatic approach’ to pay settlements with the number of businesses who will freeze pay rising this year and the number suggesting wage rises narrowing.
But most businesses are not planning to reduce staff numbers, with only 13 per cent expecting to do so, despite 38 per cent of respondents believing that government cuts will impact their profitability.
Marshall comments, ‘Many businesses say they will deal with reductions in public spending by taking a hit on the bottom line – rather than by reducing staff numbers’, adding that this behaviour is in line with the trend the BCC has observed throughout the recesssion.
Over the last three years, 59 per cent of the SMEs surveyed have cut or frozen staff pay.
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