Research published by the British Chambers of Commerce (BCC) has revealed that over two-thirds (70%) of UK employers are planning to freeze or even cut salaries during 2009.

The BCC’s latest Monthly Business Survey monitored 400 employers from the 23rd March to the 6th April. The results clearly demonstrate the damaging effect that the recession is having on UK businesses, with 58% of firms planning to freeze salaries this year, and 12% being forced to implement pay cuts in the coming year.

Even more worryingly, 50% of employers surveyed stated that they were either considering or were certain to make redundancies in the next six months.

The survey focuses on the private sector, which BCC Director General David Frost has been hardest hit by the downturn in the economy. Frost explained: “It’s the country’s private sector that has faced all the pain of this recession.

“The Government must realise that the private sector cannot bear all of the pain. There was some support in the Budget, but more is needed to help Britain’s embattled businesses so that they can drive our economy out of recession, creating jobs and wealth in the process.”

The BCC’s survey is based on the plans and expectations of employers in the coming six months. The IRS’s latest analysis of whole economy pay trends for the past three months shows a similar overall lower trend in pay awards. Other findings included:

• The headline pay award has dropped from 3.5% a year ago to 2.8%.
• 58% of pay awards are lower than they were last year.
• 25% of pay reviews resulted in a pay freeze.

Perhaps surprisingly, the BCC survey showed that only 37% of respondents blamed the Government for the current financial climate, with 50% blaming the banks and only 6% laying responsibility at the door of the Financial Services Authority.

Technorati Tags: Pay Freezes, Recession, Salary Cuts