The Issues Impacting 2013 Pay Reviews
The top issue influencing the level of pay reviews next year is affordability. That was the view of the majority of participants at our recent seminar, ‘Managing the 2013 Pay Review’.
It is not surprising that the ability to pay is so important when you consider the current state of the UK economy and the uncertainties that exist for the immediate future. In particular, the low levels of growth, reduced margins and their own customers’ ability to pay, mean that employers remain cautious about increasing their paybills.
Another key issue the workshop identified was performance – not only in terms of organisational performance that impacts funding, but also in terms of individual performance. This latter point was discussed in the context of the need to retain core skills ready for the long-awaited recovery. It was also in recognition of the potential for an increase in competition in the labour market when that recovery takes firm hold. A number of participants felt this placed an increased emphasis on the need to benchmark their pay.
With limited funds available, many felt that reward spend not only needed to be targeted but also used creatively for greatest impact. For example, several saw more use of voluntary benefits with high perceived worth but relatively low cost. Most people stressed the need to ensure persuasive communication on the total value of the package with total reward statements.
Other issues that would have a bearing included competing demands for funds such as addressing pension fund deficits; union aspirations especially in relation to lost real income in the face of inflation; and the wider adoption of the Living Wage.
Everyone at the workshop saw great challenges ahead, with 2013 shaping up to be “more of the same” in the world of reward.