We've been in a strange place for some time now, with demand for good people at an all time high, but no real pressure on pay. A number of Gazella clients have recently found that their pay structure has suffered because of decisions made years ago which are now difficult to change, or because they have salary and benefits packages which are rigid and uncompetitive. Others are living with some employees being paid more (sometimes a lot more) than colleagues doing the same job.
Wherever your business sits, a review can be in order. We recently worked with a client who had not given a cost of living pay rise for 7 years. They were reminded of this in no uncertain terms in the Employee Survey which we had recently run for them.
Two issues needed addressing. Firstly, one-off, tactical increases over the years meant that there were differences of up to 20% between the highest and lowest pay rates for team members doing the same job, and these differences were not reflected in the performance of the staff involved. Secondly, there were high levels of overtime being worked at high cost, impacting productivity and work-life balance.
Even by today’s standards, no pay rise for seven years is unusual. On closer inspection however, we found that the pay rates in place were, even after 7 years, above the national Minimum Wage and the Living Wage and remained above the equivalent regional and national rates.
We carried out a full analysis of pay data and recommended new rates for each job, balancing pay and overtime rates and introducing KPI and behavioural bonuses targeted at delivering higher levels of productivity within the same number of hours. Costs were managed by increasing the contractual hours from 40 to 45 per week (guaranteeing a higher basic salary) whilst reducing the levels of overtime and the overtime rates. Overtime itself is now more closely monitored and managed.
To speed through the implementation, we developed a full comms package, giving the reasons and the ’why’ of the change, consulted on the change and implemented it. The introduction did raise some challenges and did result in a small number of people leaving the business, but this was all managed to allow the remaining employees to grow in their roles to deliver better productivity and even higher levels of engagement.
For a confidential discussion on your pay and benefits structure, please call now on 07813-994556.