Public sector pay rises: more radical changes are needed to reimagine reward strategies

Last week the Chancellor of the Exchequer announced public sector workers, including doctors, teachers and police officers, will see above inflation pay rises this year. That’s great news for those who will be receiving rises, particularly given how hard they have worked over the past few months, but could the government have been more radical in its approach to rewarding key workers?

It was only a couple of months ago that we were discussing the need to re-evaluate and reposition reward strategy, both in the private and public sector.

We went through a period where we so keenly felt the value of those individuals who kept key shops open, deliveries flowing, our NHS functioning and care homes operating. There was large scale agreement that we need to rethink how these individuals are rewarded for their valuable contribution to society.

Back in May, REBA’s Debi O’Donovan welcomed the news that the government had introduced a new life assurance scheme for the duration of the coronavirus pandemic to support the families of health and care workers if the worst should happen.

However, this announcement came with the question: “Why are they not already covered by a DB death-in-service or group life assurance scheme?”

And, should this policy not remain in place indefinitely, regardless of the cause of death?

As for pay awards, last week’s announcement will benefit around 900,000 pubic sector workers. But there are many others, who work in social care for example, who have not been included. It is also an award that has been met with mixed reactions, although any pay increase is welcome, Labour argued that the rise would not make up for years of real-terms cuts, while the British Medical Association said doctors had hoped for “far better”.

Paul Johnson, director at the Institute for Fiscal Studies, will be tackling the issue of inequalities in earnings, savings, debt and pensions based on age, gender, social class and race in his Employee Wellbeing Congress session on 9 September, highlighting how the COVID-19 crisis has placed a spotlight on these inequalities.

It would seem, that despite calls for change, we have slipped back into our old ways when it comes to reward strategies, where clapping on the doorstep is a distant memory.

But what could the government have done differently?

Paying more isn’t always an option for any organisation, be it public or private sector, but we can take on a root and ball reassessment of reward practices to ensure that fairness is at the heart of all pay decisions.

Independent rewards adviser and researcher Dr Duncan Brown set up his Rewards after the Pandemic group to discuss just how to go about realigning pay strategy. Together they have developed a reward framework to help employers review their reward practices. The key questions cover fairness, recognition, and employee security, health and wellbeing.

More specifically, employers are encouraged to consider issues such as career progression, consistency in pay decisions, pay gaps, employment security, financial rewards linked to collective business success, executive pay structures, the benefits provided to employees to support their wellbeing and many other issues.

In truth, we knew that radical change to reward structures was not going to happen overnight. This will be a long process, requiring an honest and open approach to evaluate current processes and drive from the top to ensure that sustainable, long-term changes are implemented.

My challenge to all reward professionals is not to give up. This change will be hard, but it is not insurmountable.

The author is Dawn Lewis, content editor at REBA.

For more insight into the legacy of COVID-19 on future working practices and benefits strategies watch our expert panel debate on 23 September at the Employee Wellbeing Congress; featuring Dame Carol Black, Paul Farmer CBE, chief executive of Mind, Vish Buldawoo, VP – global benefits and wellbeing at Centrica, and Nicola Wells, global reward director at Unilever.