One in ten firms is freezing staff pay in order to try to stave off the effects of the recession, according to figures released today.
The survey, published by the Incomes Data Service (IDS), suggested that overall average pay is still increasing, propped up by sectors like utilities and defence. However, wage growth has slowed markedly.
IDS also stated that many companies are instituting "pay pauses", whereby a decision on pay structures is postponed. These do not register as pay freezes.
Pay freezes and pay cuts are seen as effective cost-cutting measures that can help avoid the prospect of mass redundancies. These measures have become more viable as the Retail Price Index, against which pay rises are normally judged, has fallen to just 0.1 per cent. It is forecast to fall below zero this month.
The Trades Union Congress has tentatively welcomed the measures. Adam Lent, the head of economics, told the BBC that, "it"s better for a large number of people to take a pay cut than to have a small number of people take redundancy."