Firms ‘preparing to freeze salaries’

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Almost one in three companies in the UK are set to freeze salaries in light of growing economic uncertainty, it has been suggested.

According to research conducted by management consultancy organisation Hay Group, the picture is similarly bleak across the rest of Europe, with over a third of countries across the region set to do likewise.

Indeed, globally, 15 per cent of the companies involved in the survey were considering the freezing of salaries for all employees.

"Short of layoffs or salary cuts, this is as serious as you can get in terms of sending out distress signals," stated Tom McMullen, vice-president at Hay and one of the research leaders.

He added: "An analysis of the forecast for next quarter, coupled with the impact of this report, could be the catalyst for much more serious economic measures."

However, in more positive news, figures produced recently by the Hotonline Network suggested that, despite reports of a labour market slowdown, 84 per cent of jobseekers feel they are either more likely or equally as likely to find employment this year as they were in 2007.

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