In the current climate where pay rises are falling behind inflation, and the current UK gender pay gap is 5.45%, employers should be looking to reduce risk and maintain pay stability in their business by reviewing employee salaries and pay gap analysis. Ensuring your business has fair pay structures will also go a long way in supporting both the retention of key staff and the attraction of new talent.
With the ongoing war for talent, and lack of candidates available for work; employers should remain conscious that existing and potential talent may be attracted towards competitors who are able to offer higher salaries or demonstrate better pay gap reporting statistics (where reported). With some in-demand roles seeing inflated salaries, business should also be aware that this may lead to distorted internal pay levels and pay disparities being colleagues and teams.
Equal pay
The law states that employers are responsible for paying men and women equally for work of equal value. Specifying that employees, regardless of their sex, should receive equal pay based on the same or similar role.
If an employee feels that they have been treated or paid unfairly because of their gender, they can make a claim to an employment tribunal under equal pay law, including sex discrimination.
What steps should your business be taking to ensure pay fairness:
- Review compensation regularly which will highlight any disparities
- Set key date/s and a standardised process for conducting salary reviews e.g. annually, 6 monthly with approval from the leadership team or a remuneration committee
- Centralise any salary processes including setting salaries during recruitment, for a consistent approach with standardised process and approval mechanisms
- Set salary band criteria in line with
- Skills
- Experience
- Responsibilities
- Qualifications
- Review additional benefits rewarded, including other financial elements such as bonus schemes or commission structures
Why introduce salary banding?
Salary banding provides are fair and coherent system, incorporating a range of minimum and maximum pay for each level within the business. The ranges represent skills, experience, responsibilities for the role. Typically, ranges increase in pay due to the complexity of the role and the responsibilities, and seniority. In some cases where the skill set is specialist or high in demand but low in availability, this may increase the range of salary awarded.
Larger organisations e.g. NHS, use bandings to ensure fairness and to reward development and progression. SMEs can also use bandings to support fairness across the business and to reward for career development and succession planning.
Where the employer is looking to remain competitive in the market, a regular review of external factors including competitor salaries, benefits offered, will support the business to remain competitive on salary and benefits therefore able to retain key talent and attract new talent.
If you are looking to implement a pay structure within the business, and would like to discuss salary banding, please contact our team at enquiries@nockoldshr.co.uk or call on 0345 646 0406 and a member of the team will be in touch.