A new survey from the CIPD, published today, claims that only one in four employees in  the UK have had a pay rise this year. The BBC picked up the CIPD finding and headlined it as Pay freeze ‘for 75% of workers’. Has a blanket of pay freezes suddenly engulfed the UK or is an opinion poll of 2,000 individuals providing a misleading picture on pay increases?

Contrary to these CIPD polling findings, regular monitoring of company/employers’ pay awards by IDS shows that most large to medium-sized firms in the private sector have awarded pay rises in the past year and that pay freezes are now largely concentrated in the public sector, as part of Government policy.

Pay freezes were at their height in 2009, in the worst of the recession, when IDS found around one-third of private sector companies had freezes, while around two-thirds gave increases. The proportion of freezes in the private sector diminished through 2010, and has fallen further in 2011. Pay freezes in the public sector started in 2010 and are set to last for at least two-years, offset by  some organisations giving pay increases for the lower paid. 

The CIPD survey was of 2,000 employees across the country, many of whom were in very small workforces. Around 236 individuals surveyed worked for ‘micro’ employers with 2 to 9 employees and a further 232 people worked in small firms with 10 to 49 employees. Nearly half the CIPD sample was made up of small firms, the public sector and the voluntary sector, which does not lend itself to providing a reliable interpretation of overall pay trends.

The CIPD sample included 390 employees working in the public sector, of whom 77 per cent said their pay was frozen. The 23 per cent with increases might well be those where modest rises have been applied to those earning below £21,000 a year.

The IDS pay data is based on data from employers and covers well over 1,000 companies and public sector organisations together covering well over 10 million employees. Our current picture shows a median increase of 3 per cent in the private sector and zero per cent in the public sector. The majority of medium and large companies in the private sector have made pay increases this year.