Pay freeze ‘can help prevent redundancies’

Posted 06/10/2009

Employees in the UK could avoid redundancy if they have their salary frozen, an expert has stated.

According to a new study by Incomes Data Services, about one in three companies are looking at freezing pay.

John Grange, an adviser at Business Link, said he believes this could be a positive step towards preventing job losses.

However, he stated that salary freezes should not be considered as the only way of preventing redundancies and need to form part of a wider strategy.

Mr Grange noted that pay freezes appear to be taking place in a wide variety of businesses, thereby affecting a large range of people.

“I don’t think it is specific to any individual or sector,” he commented.

Mr Grange added that since many businesses have seen a drop in demand, their costs are outweighing their income.

As a result, companies are looking at wage costs to help them “buy time”.