Workers are still waiting for pay cuts to be reversed

Jul 16 2010 by Graeme Brown, Birmingham Post

The majority of employers have failed to reinstate full pay to staff who took cuts to avoid redundancy and are offering non-cash incentives to keep hold of workers, according to new research.

More than three-quarters (77%) of people who agreed to a drop in salary as the recession took hold have still not seen their pay return to original levels, according to research by recruitment consultants Badenoch & Clark.

Employees remain optimistic, however, with 76% hopeful they will return to a full salary over the coming months - but just 15% have been assured this is definitely the case, the report found.

The recruitment consultants found that in the absence of financial incentives, businesses were offering benefits such as flexible working hours.

More than a third (38%) of employees were given the option of flexible working hours, while 16% had access to remote working facilities and 17% were offered additional annual leave.

Lynne Hardman, managing director at Badenoch & Clark, said: “There is no disputing that the job market in the UK has been tough, particularly in certain sectors, over the past couple of years.

“Some organisations were able to reduce expenditure by asking employees to accept pay cuts.

“This, of course, enabled these organisations to maintain labour capacity within their workforce, avoid redundancies, and ensure they have the right resources in place once the upturn arrived.

“In reality, most employees had little choice but to accept a pay cut in order to keep their jobs.

“Now the UK is emerging out of recession, we could see employees being given more work for a lower remuneration package then pre-recession, which in turn could lead to many UK employees embarking on a search for new employment.

“Where budgets are tight, employers need to find other ways to incentivise staff to keep them engaged and to prevent them from looking for new opportunities.”