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Playing Fair - How to Address the Inequality of Salaries within your Workforce In the last 5 to 10 years, salaries at a middle and senior management level in Northern Ireland have progressively increased. The power to negotiate higher reward packages was in the hands of the employee (prospective or otherwise) and as a result organisations now find they have a number of employees with salaries higher than the market norm. Conversely, today with the shift in the labour market, the negotiating power has shifted to the employer. According to the Office of National Statistics, the unemployment rate in the UK for October to December 2009 was 7.8 per cent. The number of people unemployed for more than 12 months increased by 37,000 over the quarter to reach 663,000, the highest figure since the three months to September 1997. Coupled with this is the transformation of the pay and reward structures with many organisations implementing pay freezes or cuts, as represented below. Company actions since the start of 2009 in relation to pay by job category:
Salary change
Management grades
Other salaried staff
Production workers
All staff
Pay increase
9%
12%
11%
12%
Pay freeze
57%
57%
51%
54%
Pay cut
30%
22%
15%
22%
Not stated
4%
9%
24%
12%
This current environment has transformed the working landscape with an abundance of candidates for a limited number of jobs, and with the drive to reduce costs and efficiencies it is no surprise that new entrants into an organisation are being offered (and willingly accepting) less lucrative packages. In a recent pan European survey conducted by the Grafton Employment Group, we found 74.2% of candidates are open to being more flexible in terms of starting wage in comparison to their previous job search. In undertaking such an exercise organisations should adopt the following approach: • Review current salaries Having established a clear policy on pay and reward, organisations must commit to communicating this to all staff and line management. Staff affected must be made aware that whilst others may benefit from a salary increase their pay may be maintained at the same level until parity is resorted. In addition efforts must be made to ensure line management do not operate outside the policy. Clearly to undertake such an initiative will be fraught with resistance and as such requires buy in from the most senior level, however, failure to address such a fundamental issue could have wider long term issues for employee moral and equal pay claims. Liz Torrans is Strategic Account Director with Grafton ESP. Grafton ESP is the HR specialism division of the Grafton Employment Group delivering customised HR services that enhance clients’ bottom line. For more information on any of the above please contact Grafton ESP by phone on 028 9055 6350, online at www.graftonesp.com or by email . Feb 2010 - The Balancing Act How can SMEs balance the growing requirements of employment legislation and the demands of the business? For most SMEs the thought of facing an industrial tribunal can be a real nightmare. Yet with some planning and adopting good practice it is possible to sleep easier. As a busy manager it is difficult to keep up to pace with all the changes in employment legislation especially if you don’t have on-site HR, or legal support. Lets face it, this can be one of those activities on the ‘to do’ list which often slips to the bottom of your priorities. Employment legislation is an area that you ignore at your peril, with legal fees, collation of discovery documentation, time away from work, negative publicity and the potential for a financial settlement, which could be a real drain on the business. One way SMEs can protect themselves is to develop standard procedures in line with legislation to either avoid difficult situations arising or help resolve them at source. 7 Key Actions to help with your balancing act: Having policies in place may not remove the chance of an employment claim being taken, however, it will ensure you have a valuable defence should a claim arise and may mitigate your liability and associated costs in such an event. |
