UK Company Salary Freeze
Company Info January 28th, 2011
LONDON – About half of the companies in the UK plans to freeze employee salaries despite the signal recovery from the worst economic crisis.
Concludes a recent survey conducted CBI Group and manpower recruitment firm Harvey Nash, which was released in London conducted last August and September of 243 respondent companies employing a total of more than 500 thousand people. Both institutions also found that only 4 percent of companies surveyed plan to increase the percentage of employee salaries above the inflation rate.
Despite holding a raise, according to the survey, the number of companies that do not hire new employees has decreased from 61 percent to 31 percent in the spring of this year. In the survey were also known to only a few companies that saw the need for extreme cost-cutting like to close operations and pay for overtime. “The worst may be over, but the company remains very cautious to raise wages,” said CBI deputy director John Cridland as quoted by the BBC yesterday.
He added that market conditions in 2010 will continue to be very hard and caused the growth in that period to be weak so that payments will be reduced salary for some time. “A new spirit of cooperation between employers and workers will become evident to stimulate the competitiveness of the British when they returned to growth. This will provide more flexible space for improvement of the balance of life,” he said.
CBI survey also found that half of the company has reduced the recruitment of university graduates, and only a fifth of hiring new graduates. This causes the number of unemployed youth in England in the period of July-September 2009 increased to 19.8 percent or 30,000 people increased, the highest in history. According to the Office of National Statistics (ONS), total unemployment in the UK in third-quarter 2009 reached 2.46 million people, equivalent to 7.8 percent of the total population. Of these, youth unemployment was 16 – 24 years increased to 15,000 so the total 943,000 people.
Related to business conditions, the survey data found that nearly half of the respondents considered the UK as a less attractive place to do business than five years ago. Respondents estimated that these conditions will be much better in the next five years.
Inflation Start Up
On the other hand, the consumer price index (CPI) in October and then in the UK rose 1.5 percent from 1.1 percent the previous month. Another indicator that the retail price index (RPI) which is used to increase the rate of inflation rose to a level of -0.8 percent from -1.4 percent previously.
The index includes the price of mortgage interest payments and housing costs. Recent inflation data released was in line with the ONS previous analyst estimates because of rising inflation sparked October increase in fuel prices compared to last year. According to the ONS, the largest impact of rising inflation in October 2008 compared with prices derived from fuel and lubricants in which only 0.7 percent decline in October.
The percentage is smaller than the decrease in the same period last year of 6.1 percent. In addition, the increase also occurred at a used car prices by 13.2 percent and is rising fastest in the last year.
