Croner research: Total pay rises have fallen by a third

Total pay rises, including bonuses and overtime, have fallen by a third, and basic earnings increases have more than halved since January 2011, according to the latest Croner Reward Index.

The index also found that both basic and total pay movement figures for managers are stable in comparison to the first quarter in 2011, which was just over 1% for basic pay and at 1.3% or 1.4% for total pay.

Across-the-board settlements, taken as an average over the last 12 months, are still running at 2% for a second consecutive month. The four-month settlement figure for all employment types is 2.3%.

Viv Copeland, head of Croner Reward, said: “This will no doubt put extra pressure on people’s finances given the economic squeeze currently being endured.†

“However, what may be of most concern is the total pay figure for employees that has dropped to -0.8%, which would indicate a drop in overtime.

“Looking back over the last year, the basic pay increase for employees in March 2010 stood at 4.3% and at March 2011 is now down to 0.1%. The overall downward spiral that we have seen for employee pay movement since last summer paints a bleak picture.

“The difference between the settlement figures and the earnings movements is a downward pay drift caused by a combination of restructuring to reduce costs, lower bonuses, reduced overtime and pay freezes.

“The movement figures are reflecting the impact of pay freezes which peaked at 20% in 2010. Currently, 14% of our respondents have given a pay freeze in the last 12 months.

“As for forecast figures, across-the-board 12 month forecasts are running at 2.5% for March 2011 which is on a par with the 2010 average and the sixth straight month the figure has been 2.5%.

“All in all, Croner’s figures show that the current squeeze on living standards is not translating into vastly increased pay settlements.”

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