According to the Accountancy Age/Reed Accountancy Personnel Big Question, over half of UK financial directors said they were not budgeting for higher pay rises this year.
Despite a buoyant economy, FDs are still keeping a tight reign on costs.
Only 36% said they would be giving their staff pay rises higher than last year, with many saying that hikes were necessary to keep staff.
Low inflation has helped to keep pay rises low, with one FD saying: ‘Inflation is staying at a reasonable level, so there is no need for an increase.’
David Martin, FD of Smiting Industries, agreed: ‘We couldn’t possibly justify an increase.’
Staff in some sectors are set to fare worse than others.
One FD said: ‘Business is very tight in the manufacturing sector, so we cannot afford to over promise our staff.’
The picture is no better in retail where one FD said: ‘The retail environment remains extremely competitive and any salary increases will be at very modest levels.’
Others are finding more imaginative ways to reward their staff. As one FD put it: ‘We are still in the start-up phase and having to cut costs; instead we get staff drunk on a Friday and buy them chocolate cake to keep their commitment.’
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