Fewer pay freezes expected, but reward and recognition still important

Date: 26/05/2010

Fewer companies in the private sector are forecasting pay freezes this year, according to the Institute for Employment Studies (IES), although many firms are still focusing on reward and recognition as an alternative to higher pay.

Duncan Brown, director of HR Business development at the IES, said the recovery is picking up in some sectors, which are now feeling confident enough to raise wages in order to sustain employee motivation.

"There is still an emphasis on total rewards so staff feel valued even though the pay pot may still be not growing very much," he commented.

"Higher price inflation is also putting pressure on employers."

According to the Bank of England's Agents' summary of business conditions published on May 19th, labour costs remain muted, with the majority of contracts deciding either to freeze pay or make modest positive pay awards.

However, there were signs that pay growth is edging higher as businesses attempt to hold on to talent and boost employee motivation.

Written by Peter Chad. ADNFCR-2060-ID-19802204-ADNFCR

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Fewer pay freezes expected, but reward and recognition still important

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