More than 40% of workers have seen their pay frozen in 2009, but workers at small businesses are the happiest with their pay, according to a Chartered Institute of Personnel and Development (CIPD) survey of over 2,500 employees.

The survey revealed that 41% of employees experienced a pay freeze this year, up from 24% in 2008. The percentage of staff receiving a pay increase also dropped significantly, from 67% last year to 50% this year.

Despite the widespread pay freezes and reductions, the satisfaction rate of staff with their pay has risen in all sectors since 2008. Net satisfaction scores decline gradually in line with the size of the organization, with a net +30% score in small firms compared to a net -48% score in large organisations.

These figures indicate the greater flexibility that small companies have to review staff pay on an individual basis, rather than implementing pay cuts across the whole firm and a better understanding by staff of the difficult economic situation.

Of those employees in the private sector that received a pay rise, 70% were satisfied with the amount.

The state of the economy is by far the most common reason given by businesses for pay freezes and cuts, with over 70% of firms citing this. For those who have managed to get a new job after being made redundant in the past year, two-thirds are on average earning 25% less compared to what they used to make. 


"Employers in the private sector will be relieved to see that their employees are particularly understanding of the economic realities they face. Even pay freezes have not so far resulted in high levels of employee dissatisfaction," said 
Charles Cotton, reward adviser at the CIPD.