Sunday 27 September 2015

Considering company pay rises for 2016?


Wages haven't been keeping up with inflation over the last 6 years. During this time many employers haven't increased salaries either because they can't afford to, or because they don't need to: wage inflation has been so low that they're still paying market rates.

But the forecast now is that pay will increase by about 3% over the next year. This is the highest increase since January 2009. Most economists expect that wages will continue rising at 3% p.a., slowly moving towards 4.5% by 2017.

Predicted movements in pay levels are only part of the story: affordability for the business is the first consideration with pay increases. The picture remains mixed depending on the fortunes of the sector: for example there are still wage freezes in parts of the manufacturing sector because of tough trading conditions, while rises of up to 7% are being agreed by construction firms.

There may also be specific market rate pressures, for example in skills shortage areas where you have to pay a premium to recruit from outside.

Average salaries shown in recruitment adverts have actually decreased over the past year. There are some indications that companies are channelling resource into salary increases for established middle managers and senior employees, incentivising them to stay rather than recruiting in from outside.

It’s so much better in terms of the psychological contract to award salary increases before and not after a valuable employee finds another job paying a lot more and hands in their notice!

An important principle with salary reviews is whether to award for merit – which will vary between your employees – or whether to give everyone the same rise. Within a budgeted 3% total paybill increase, a practical framework to differentiate could be:
  • 5% for high performers and those who have taken on additional responsibility 
  • 3% for the majority
  • 0% for employees in their first 3 months with you, those working their notice and poor performers. You don’t have to give every individual a pay rise - and for poor performers, it can give totally the wrong message!
Protect your differentials! If you’ve had to recruit in at a higher salary than your existing people doing the same job, this is a good opportunity create pay parity.

At the lower end of the market, the increase in National Minimum Wage to £7.20 from next April will create more upward pressure on wages. Make sure there will be a clear step between people recruited on the National Minimum Wage and your experienced people who have learned the job.

Those on longer term career development programmes such as apprentices and trainee accountants need stepped increases planned in so they finish their training at the market rate salary for a fully trained person.

Mandatory Equal Pay audits for those with 250+ employees from next year are likely to extend down to smaller organisations in the medium term. Looking ahead, this would be a good time to analyse the gender pattern of pay in your business, and if there are any significant gaps, start to remedy them with this year’s pay review.


The Human Resource will be pleased to help your business with the salary review process: benchmarking salaries and advising on pay policy, equal pay audits, increase budget and the communication to your employees. 

Contact us today on 07884 475303 or enquiries@thehr.co.uk for a free informal discussion.

Sunday 13 September 2015

Motivating Your People on a Budget



Motivating staff isn't all about expensive initiatives: bonuses, salary increases, weekend conferences abroad, outdoor team building events, etc. There are plenty of other things you can introduce for little financial outlay that will motivate people too and will even be more effective in the long run:

1 Recognition

Recognition of employees' achievements and hard work is the single biggest motivator - and it's one that's available to companies of any size. Public recognition and communication of a job well done are what matters to people.

It may be something as simple as a sincere "Thank you" or "Well done" at the right time. For special efforts you might want to add a token of appreciation - such as a bottle of bubbly or a restaurant voucher.

Or take it a step further by offering high achieving employees additional responsibility or the opportunity to share their expertise with colleagues.

Ultimately, when you recognise someone for something they've done that's of value to your company, you'll make a positive difference to the way that person feels.

2 Invest in training

Investing in people is also crucial for motivating employees.

When someone comes back from a course with a new idea or new way of doing something, it injects energy as well as knowledge into the organisation. And it sends a clear message to people that you believe they're worth investing in.

It doesn't have to be expensive. For example it may be more cost effective to bring a trainer in-house for a day to train several people at once, instead of sending them on individual courses.

Or you could sponsor valued employees on college courses, relatively cheap training, to study for qualifications that support the work of your company and develop the person at the same time.

3 Improve and develop the business

Another way to motivate staff is to lead a culture of change.

Not change for change's sake: if managed effectively, change makes employees feel they are part of an organisation that is developing and improving, and where life will be different for them in a year's time. It keeps them looking forward to the future and mentally engaged with the company they work for.

4 Involve people

Sit down regularly with your people and ask for their ideas about how processes can be improved. Involving staff in this way makes them feel valued and appreciated, and that they have an active stake in the way things will be in the future.


The Human Resource will be pleased to advise on ideas for motivating within your work environment, along with other ways of making the very most of the people you employ.

Contact us on 07884 475303, enquiries@thehr.co.uk.

Sunday 6 September 2015

Top tips for encouraging your line managers to improve performance



Under your leadership, your line managers play a vital role in creating a productive and high performing company culture.  

Here, we share our five top tips for encouraging them to take an active role in improving performance - and to help your company to thrive.

1    Continually improve processes 

A recent study has shown that inefficient processes are the biggest contributor to dwindling levels of business performance.  And no matter how well work is being carried out, it can always be improved.

Encourage a mindset among your line managers to continually review processes and identify where tasks can be done more effectively, where costs and time can be shaved, whether customers can be handled better, where quality can be improved, where bureaucracy can be eliminated.


2   Emphasise follow up and progress chasing 

To make sure day-to-day work is carried out to the standards you set, be clear with your managers that you expect them to monitor their team's workflow, to have effective follow up processes in place and to progress chase.

They need to spot the highlights so they can thank the right people.  And if things go wrong, they need to carry out a post-mortem to make sure it doesn't happen again!  Be very clear about the level of their responsibility and authority to sort things out.

3   Communicate expectations clearly

In a recent study, over a quarter of staff say that confusion at work - unclear goals and expectations - repeatedly mean they waste time and miss targets at work.    


This doesn't happen in a productive, high performing business.  


Give your line managers the clarity they need about the company's goals and expectations to communicate them to their teams at every opportunity.  When people can understand what's expected of them in their day-to-day tasks, and why, they're much more likely to be motivated and perform to a high standard.



4   Encourage your managers to develop their people

If your employees aren’t being given the opportunity to work at their best and to develop their potential, they’re likely to switch off or start looking elsewhere.  Either way, your business will waste valuable energy that could be used to drive up a high performing culture.

Instead, encourage your managers to develop their people by providing opportunities to learn, coaching to pass on skills and knowledge, and planning experience in more challenging work when their people are ready for it.

5   Tackle issues with individual performance 

To create a high performing culture, your line managers need to be having regular quality conversations with everyone in the team about their individual performance and addressing areas of concern.


If line management capability is something that you want to improve, we can help. We believe that successful businesses are created when leadership teams are given the tools they need to excel.

For an initial discussion about how we could bring our practical approach to your business, give us a call on 07884 475303 today.