According to a survey carried out by the Chartered Management Institute (CMI), 18% of organisations have had to cut their employees’ pay due to pressures brought on by the pandemic. More employers are reported to confirm they are prepared to do so if necessary for their survival.
The survey found that a second lockdown and no deal Brexit were among the most pressing economic concerns for employers.
CMI Chief Executive Ann Francke has warned that pay cuts may be unavoidable after government support for employees is withdrawn.
Some firms have already slashed pay and a further 30% have confirmed they would consider implementing pay cuts if it is necessary to keep afloat.
Earlier this year, cabin crew and pilots at airline company Ryanair accepted a 20% pay cut in order to save jobs, and the High Pay Centre said that one in four FTSE 100 CEOs had accepted a pay reduction to avoid job losses elsewhere in their organisations.
Chancellor Rishi Sunak has ruled out an extension to the furlough scheme, despite repeated warnings that it could lead to widespread redundancies and a surge in the unemployment rate. Currently, the furlough scheme is due to end with effect from 31st October 2020.