Research: Review of the use and effectiveness of market pay supplements

This report looks at the use and effectiveness of market pay supplements and recruitment and retention payments in the public sector.

Key findings:

• Such market and skill supplement payments are neither universally successful nor unsuccessful, good value for money nor a poor return on their cost.
• The research did not find significant growth in the use of supplements as a ‘knee-jerk response’ to the tightening labour market.
• Funding issues have played a part and so detailed control processes were generally found, requiring comprehensive evidence to justify a supplement and an annual renewal.
• The research found that used selectively and with strong targeting, there is evidence of some positive impact from using supplements, particularly in lump sum form.

The research was carried out by the Institute for Employment Studies and published by the Office of Manpower Economics.