Wages suffer as firms limit costs

Posted on 20 Oct 2008 by The Manufacturer

An emerging tactic among manufacturers to minimize the threat of economic uncertainty is to defer settlement awards and freeze or reduce the increases of those they pay, according to the latest Survey by EEF, the Manufacturers’ Organisation.

One in ten pay negotiations are currently being deferred which is the highest level in five years. The average settlement is an increase of 3.2 per cent, slightly down on the last reported figure of 3.3 per cent.

Freezes stand at 3.5 per cent.

David Yeandle, EEF Head of Employment Policy, said: “This very high level of deferrals, together with the slight fall in pay settlements, demonstrates that manufacturers are battening down the hatches and making every effort to control costs in this period of increasing economic uncertainty.”

The survey covers July, August and September with the comparisons above made against data for June, July and August. The trends are based on information from 115 settlements covering 13,579 employees.