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Senior staff bear the brunt of pay freezes while employers continue to invest in junior employees

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Employers are continuing to invest in junior members of staff, while senior managers and executives are bearing the brunt of pay freezes according to a new report.

Mercer's quarterly Salary Indicator (MSI), found 59% of companies are increasing their salary budget for manufacturing and service staff, 59% are doing so for office and clerical staff and 50% are making increases for professional staff.

This is compared to 46% that are increasing salary for managers and 37% planning to increase executive pay.

Six out of ten employers intend to freeze pay
for executives and 51% are doing so for senior management. For professionals such as sales teams, 45% of companies have already implemented pay freezes while 36% are doing so for general office, clerical and production and services roles.
 
More than nine out of 10 (91%) remain committed to reviewing staff salaries on an annual basis and 85% will maintain the proportion of fixed to variable elements within their current pay mix. Thirty-nine percent of respondents are altering other non-cash aspects of their reward plans. 
 
Chris Johnson, head of Mercer's human capital business in the UK, said: "Remuneration, like any strategic decision, has to be evaluated in a strategic framework. Companies need to keep customers, remain efficient and provide safeguards for the future. Many are putting effort into analysing their businesses, categorising their staff and reviewing the pay elements for each category.

"Freezing the pay for essential revenue-generating staff can be counter-productive as you may lose them and their revenue to a competitor: there is a strong case for increasing their rewards as long as they perform."