PwC issues warning over pay freezes

PricewaterhouseCoopers said although employees understand the need for pay freezes, company brands would be affected for the next decade over employment decisions it makes now.

Over 700 UK workers, that saw their pay or reward schemes affected by the recession, were surveyed. The report by PwC – 'Managing tomorrow's people: how the downturn will change the future of work' – warned many powerful employer brands will be unable to attract top talent in the next decade as a result of employment decisions made during the downturn.

Jon Terry, partner and head of reward, PwC said: “Pay and promotion freezes, changes to pension schemes, cuts in recruitment and slashed training budgets, combined with poor communication, have eroded the bonds of trust between some employers and their employees."

He added: "While workers are generally resigned to what the recession may mean for their pay and promotion prospects, communication between employers and employees can make all the difference between how this news is received and the level of trust in the relationship."

"Those who continued to offer their employees new opportunities and invested in their people pipeline are now at a competitive advantage," he said.

Just fewer than half, 49%, said they understood the reasons behind the cutbacks with just 8% responding they were angry over the amendments. It wasn't all good news as 34% said they found pay review decisions "demotivating".

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