Blogs at Innecto are normally and deliberately non-political, but it’s impossible to talk about this important subject without straying into the headlights of the swerving political lorry that is Britain today. So you have been warned – buckle up!

The first division of note is that this matter raises the subject of ‘pay’ generally with each sector. Two very different mechanisms manage and set pay.  In the private sector, it’s all about supply and demand at a micro level, paying for talent and turning employee’s contributions into profits. In the public sector, it’s about maintaining essential services and what the country/taxpayer can afford. It used to be clear what the respective employee ‘deal’ was; public sector workers got better job security, better benefits and pension, and private sector workers received generally higher pay (including bonus). But, has this distinction been blurred after the last 10 years? For many of the last 10 years, public sector workers were receiving higher annual increases than private sector workers: this fact seems to be forgotten by many.  If the lines have been blurred what makes each sector an attractive proposition for employees – what’s the deal? Is it aligned to the organisation’s objectives and values; is it communicated well? 

Division two is what is happening more broadly around pay and the feeling that there is an increasing division between rich and poor.  Although there is no definitive evidence to suggest the widening gap, for many it certainly feels that way. This presents a challenge for both private and public-sector HR and Reward teams; low pay exists in both with most minimum wage jobs now in the private sector, in catering, care, hospitality etc.  It is about wider social division and requires a creative and meaningful approach to reward that is inclusive, cohesive and meaningful to both ends of the pay spectrum.

My third and final division of concern lies within the Cabinet itself. We now have the likes of Boris Johnson and Michael Gove, airing their views in public on this very important subject, and other Ministers firing back at them.  Theresa May must be feeling very exposed – I thought that there was no ‘I’ in team?  Leave it to the pay review bodies, I say. This all points to a divided government, without a clear strategy on public sector pay.  

What does this all mean for HR and pay professionals in either sector? As the war for talent continues to rage, our mission is to keep hold of sufficient talent within our organisation. We should focus on defining and communicating our employee ‘deals’.  We need to keep pay market competitive and create robust, fair and consistent pay structures. While there is still uncertainty with what may be to come, communicating a clear employee value proposition can keep your organisation on the right side of the road.

Contact us to find out how Innecto can help with your employee value proposition. Call 020 3457 0894

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