UK companies put pay awards on hold as COVID-19 hits
LONDON (Reuters) – Half of large British employers are thinking of freezing pay or delaying annual increases for staff as the coronavirus shutdown hammers the economy, a survey published on Thursday showed.
Some 51% of the 400 organisations surveyed by XpertHR, a human resources data provider, said pay deals would be hit by the crisis, either via a freeze or by postponing the annual pay review until later in the year.
A further 33% were unsure what the impact would be and only 16% said there would be no influence.
“In the first few months of the year there was a clear upward trend in pay increases,” XpertHR pay and benefits editor Sheila Attwood said.
“However, we expect this to go no further, with pay pauses and pay freezes becoming commonplace as a result of the coronavirus crisis,” she added.
In the three months to the end of March, XpertHR recorded a 2.4% median basic pay award across the economy, up a bit from a 2.3% median pay award in the three months to the end of February, based on a sample of 180 basic pay awards.
Around one in four British firms have temporarily closed due to the government’s coronavirus shutdown and more than 70% of small and medium-sized businesses have put at least some staff on leave, previous surveys have shown.
The shutdown is likely to bring an abrupt end to several years of strong job growth, and a more recent rise in pay.
Britain’s budget forecasters have said the unemployment rate could more than double to 10% in the second quarter.
(Reporting by William Schomberg, editing by David Milliken)