With the incidence of pay freezes reaching unprecedented levels in 2009 (subscription required), the use of pay cuts showing slower but nonetheless unwelcome growth, and some poor souls being asked to work for free, you might think it would be a tall order to put a positive spin on the dire state of the current UK reward situation. But Bank of England Monetary Policy Committee (MPC) member Andrew Sentance has done just that.
In a recent speech, Sentance argues that the current downward mobility in pay awards is not necessarily a uniformly negative phenomenon (PDF format, 57K) (external website).
He argues that the UK labour market has become increasingly flexible since the last recession, which will help to shore it up during the recession and to recover swiftly once economic growth returns. Sentance continues:
We are seeing some of the benefits of increased flexibility in the current recession, as companies have sought to minimise lay-offs by negotiating temporary changes to pay and hours of work. This co-operative approach is not only helping individuals and companies manage through the recession. But it should also help to reduce the loss of skills and experience that comes about through job losses and prolonged unemployment - providing a stronger skill and employment base for the economy when the recovery comes.
The next IRS analysis of whole economy pay trends will show how pay awards are holding up (or, more likely, not) in this context, when it is published to XpertHR's Pay and Benefits homepage on Friday 26 June 2009.
In the meantime, XpertHR provides useful resources for employers who have been forced to abandon the practice of giving employees an automatic annual pay increase as a result of the 2009 recession, as well as for those in the happy position of still being able to award increases, including the following (subscription required for each):
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