Employee Benefits Summit 2011: Decent pay rises are back on the agenda

Just over a third (37%) of delegates at the Employee Benefits Summit 2011, are are now offering staff decent pay increases although these are not as high as pre-recession levels.

A further 33% said they were only able to give some staff good pay increases, while the majority of the workforce received no or low rises and 17% of delegate said that pay increases were back to pre-recession levels. However, 7% said all rises in their organisation were small or non-existent.

Speaking in a panel debate on the second day of the Summit, Tim Taylor, head of† reward and recognition at Tui Travel UK and Ireland, said the organisation made decisions around pay by responding to the needs and performance of the business. It introduced a two-year pay freeze for managers but reviewed pay for staff working in customer-facing areas.

Taylor said: “It is a challenge. We have unionised areas of the business and there seems to be a lot of changing views around increased wages. From our point of view, it is a consistent approach we are taking.”

Responding to a question on whether low pay increases could in fact be de-motivating for staff, Craig Truter, reward manager at Centrica, said: “I would rather get something than nothing. The message around zero pay rises is a stark message.”

Mark Bradshaw, HR director – reward, wellbeing and policy at Amey, added: “If [any] pay increase is affordable then why would you not do it?”

Employers that did not make even small increases could find themselves having to catch up to competitors when market conditions improve, said Alison Main, compensation and benefits manager for Europe Middle East and Africa at Oracle.††

When delegates were polled on how their organisations were mitigating the impact of low pay increases, 33% said they were using a combination of methods including: using benefits to soften the blow; offering ‘free’ perks such as flexible working or holidays; and focusing on communicating the value of reward and benefits.

Tui Travel UK and Ireland introduced voluntary benefits to compensate for its two-year pay freeze affecting managers. “When you have got a pay freeze you have to give staff something,” Taylor said. †

For more articles on the Employee Benefits Summit