It will be another tough year for employees in 2010, with an increasing number of firms planning wage freezes or pay cuts and others axing perks such as gym membership and free healthcare. The latest monthly business survey by the British Chambers of Commerce (BRC) found that 63% of the 260 companies questioned were considering pay restrictions and 18% were looking at the removal of benefits.
This follows a year in which pay has been held down across the private sector, with 40% of firms estimated to have frozen wages.
The persistent squeeze on pay is a sign that companies do not see the economy improving dramatically in 2010. Respondents to the survey expected a fragile recovery in business conditions, with 67% saying they would operate at the same or reduced capacity levels in the first quarter.
Retailers also remain cautious about the year ahead, despite all the post-Christmas cheer as shoppers flocked to stores and malls for Boxing Day bargains this weekend. Four out of five retailers surveyed by industry group the British Retail Consortium expect sales in 2010 to be the same as 2009. None thought sales would be worse, and just over a fifth thought they would be better, but they are worried about a range of factors that could affect the strength and speed of the recovery, according to the report, out today.
Chief among those concerns was weak consumer demand, closely followed by rising unemployment. With other risks including an uncertain tax outlook, nearly a third of retailers said they expected to cut jobs in the coming year, compared with this year.
"Despite the last-minute hurdle thrown at shoppers by the weather, it's been a healthier retail Christmas than last year," said BRC director general Stephen Robertson. "Retailers will be hoping this is a permanent turn for the better, not a brief break in the gloom. It's reassuring that our snapshot shows no retailers expect sales in 2010 to be worse than this year."