The conversation on public sector pay will feed through to the private sector and, with inflation rising, EEF’s HR and employment law consultants have already seen an increasing number of employee pay disputes. Wage growth (according to the ONS) on a three month average rate for regular pay (excluding bonuses) was 2 per cent. This is well behind the 2.9 inflation rate recorded in May 2017. The pressure on public sector pay has been well publicised and it is likely the pent up pressure on wage negotiations and settlements will only continue and increase with inflation now feeding through from the fall in the value of the pound. What can employers do in this hostile climate?
Take the temperature
Know your workforce. If you have trade unions, do you have a clear understanding of the areas they represent and a written disputes procedure? Too often, it is only when a dispute breaks out that these questions are asked.
Understand what employees are thinking. If you don’t have trade unions or only partial trade union recognition, do you have a clear mechanism for judging the mood of your workforce on pay? A properly constituted consultation committee or council can represent the views of everyone and give you a better idea of what people feel on the issue of pay across your business. Your trade union might only give you a one sided picture!
Gather the right information. Where do you sit in local and national pay statistics? What are local employers doing on pay? Are you able to retain staff? What is the going rate in the local area? Have you reviewed the latest pay benchmark data?
Put your negotiation hat on
Be flexible. Pay negotiations can often become stuck in arguments on a single issue and sometimes over pointlessly small sums of money. What else could we consider to bridge the gap and reward people without breaching financial targets set by the larger group? Unconsolidated one-off payments can be remarkably effective and self-funding initiatives on absence control or productivity improvements may assist in avoiding damaging disputes.
Seize your opportunity. Going into a dispute situation can be risky, especially where you do not know where it may end up. You may have to cope with a more expensive deal than expected but……remember….
Reward your workforce for consistently good performance. If you have a record of low absence rates or good on time delivery and high quality standards, take the opportunity to recognise that. Good management relies on goodwill and putting some of that in the bank may be valuable to us in the uncertain times ahead.
How we can help
Chris Harries is a qualified Barrister and EEF’s National Head of Employee Relations. Chris provides advice, guidance and practical support on the employee relations arrangements and employee disputes to organisations of all sizes and industries.
To find out how our Employee Relations experts can support your business, call 0808 168 5874 or email HRenquire@eef.org.uk