Zoe Woolacott | 09 Apr 2020

Half of employers honour 2020 pay awards

IDR press release

Not for release before: 12 noon on Thursday 9 April 2020

 Half of employers honour 2020 pay awards

Over half of employers are adhering to previously made decisions on 2020 pay reviews and paying wage increases to staff, according to the results of a survey of pay decisions and furlough arrangements by Incomes Data Research, the independent pay monitoring organisation. Some 51% of those surveyed who had already made a decision on their 2020 pay award said they will honour the agreed increases for workers, despite the impact of the Coronavirus lockdown on economic activities. At the same time, just over a quarter (27%) are deferring annual pay awards until later in the year, while a little over a fifth (22%) have said that pay is being frozen for 2020. Some employers have frozen pay for all staff, while others have frozen managers’ pay only.

All participants in our survey whose 2020 award is part of a long-term pay deal told us that these increases will continue as planned. Over 1 million employees working for NHS England were awarded a pay rise of 1.7% on 1 April 2020 in the final year of a 3-year pay restructuring deal.

‘Most employers are making efforts to maintain the morale and motivation of staff in the face of the pandemic by sticking to their previous commitments on pay. But some firms are experiencing difficulties that are having knock-on effects on pay decisions’, commented Ken Mulkearn, Director of Research at Incomes Data Research.

The majority of those employers honouring pay reviews are in the private sector, particularly engineering and financial services, as well as the energy and water sector. However, a number of organisations in the not-for-profit sector also intend to honour previous pay decisions, especially those organisations offering key support with care services or housing. Deferrals and freezes are spread across all economic sectors.

Other responses are also in evidence, with some 11% of respondents reporting that they have temporarily reduced pay for some or all workers. These respondents are mainly in the worst affected sectors where social distancing measures mean sites are closed, for example, hospitality, air transport and construction, but also other areas where the lockdown has resulted in a significant and abrupt downturn in demand.

By contrast, some 6% of survey participants have made additional payments to staff, in the form of bonuses, honoraria or attendance payments, with examples including bonuses of 15% at one social housing organisation. These respondents are found in sectors that are critical to the effort to limit the spread of the virus, such as food manufacture, social care, utilities and local government.

Furlough arrangements

Some 56% of respondents have placed some or all staff on furlough, with most of these (41% of all participants) topping up pay to 100%, rather than just the 80% covered by the Government under Coronavirus Job Retention Scheme (CJRS). Just 15% of the total have reduced pay for staff on furlough. A further 15% have reduced staff hours in an effort to contain costs at a time of reduced demand for goods and services.

IDR conducted a survey of HR professionals between 25 March and 6 April 2020. The survey received 76 responses from mostly large organisations employing nearly half a million workers in total.

 

For any queries relating to this research please contact Ken Mulkearn in our Manchester office on 07792 786532 kenmulkearn@incomesdataresearch.co.uk Or Louisa Withers in our Southend office on 07584552178 Louisawithers@incomesdataresearch.co.uk

 

Note for editors - Incomes Data Research monitor pay reviews across the economy throughout the year and publish findings in ‘Pay Climate’, our quarterly e-bulletin, with additional monthly updates on our website: https://www.incomesdataresearch.co.uk/

 

Participants include: 2 Sisters Food Group, Affinity Water, Ageas Insurance, Air Products, Altro , Archaeoleg Brython Archaeology CYF, Arconic Manufacturing, Associated British Ports, AWE, Beamans, Bombardier Transportation, British Pepper and Spice Company, Bracknell Forest Council, Cancer Research UK, Chartered Institute for Securities and Investment, CNH Industrial, Co-operative Group, Dounreay Site Restoration, East Riding of Yorkshire Council, Epson, Experian, Fenner Dunlop, Financial Ombudsman Service, Green Apple Catering, Guinness Partnership, H&R ChemPharm UK, Heathrow Airport, Hinckley and Bosworth Borough Council, Hitachi Automotive Systems UK , Irwin Mitchell LLP, Jacobs Engineering, John Wiley and Sons, KCA Deutag, Kensington Mortgage Company, Kier, Lloyds Banking Group, Leeds Building Society, London Borough of Brent, Lubrizol UK, Luton Borough Council, Magna Vitae, Midland Heart, Mitsubishi Chemicals Advanced Materials, Nando's, National Grid, Nationwide Building Society, Nuneaton and Bedworth Borough Council, Penfro Peche, Pinnacle Group, Plessey, PQ Silicas, Primark, Rambus, Royal Borough of Windsor and Maidenhead, Scottish and Southern Energy, Services For Education, Shakespeare Birthplace Trust, Siemens, Sue Ryder, Surrey County Council, Tameside Council, Tarmac Trading, Trusted Financial Advice, The Crown Estate, Universities and Colleges Employers Association, Uniper, University of Birmingham, Valuation Office Agency, Vision Homes Association, Warwickshire Police, Whitbread, Yarlington Housing Group, Yorkshire Water.