Employers still taking cautious approach to pay

Employers in the private sector are increasingly taking a cautious approach to pay as they look to stay competitive, according to research conducted by the Confederation of British Industry (CBI) and recruitment firm Harvey Nash.

The quarterly CBI/Harvey Nash employment trends survey covers 319 organisations, which employ around two million people in the UK.

It found that pay restraint has remained the norm, with nearly half of all respondents planning a below-inflation pay award or targeted pay rises, and one-fifth planning a pay freeze in order to remain competitive.

The research also found:

  • 67% of respondents said employment regulation is the biggest threat to competitiveness.
  • Nearly half of respondents have been affected by the introduction of the agency workers regulations.

Katja Hall, chief policy director at CBI, said: “Employment law is now seen as a brake on competitiveness by two-thirds of firms, and 52% expect new rules from Brussels to prove damaging in the next five years.

“The agency workers regulations are a case in point, with half of respondents indicating that they’ve been affected by their introduction. Alleviating these damaging effects should be an issue of highest priority for the government.”

Read more on pay trends in the private sector