In 1966 IDS Pay Report galvanised pay setting in the public and private sector with previously unavailable data and insights on pay trends and policies. 44 years on, with the launch of IDSPay.co.uk in August this year, we are proud to say we have been true to this important legacy.

IDSPay.co.uk is an online pay benchmarking service that builds on the decades of pay data, methodologies and relationships that IDS has built up. It facilitates pay professionals to mine our rich data within pay levels, settlements and executive compensation. All of which is presented in a sophisticated online environment that allows for searching across named organisations, sectors and regions with best-of-breed reporting and charting functionality.

We are also excited to announce that on 3rd December we will be hosting our first joint conference with Acas which focuses on bargaining and industrial relations prospects for 2010. The conference brings together speakers from IDS, Acas, the TUC and employers bodies to give real insights into contemporary industrial relations, with a key theme being ‘shaping the future in recessionary times’. The event will be chaired by Ed Sweeney, the Chair of Acas. Click here for details of the conference.

Yours sincerely,

Al Keve
Head of IDS

Occupational focus: Finance staff

In this article we look at pay levels for finance staff, using data from IDSPay.co.uk. The analysis covers three job levels from the IDS Job Evaluation Scheme – a series of job levels allowing roles to be grouped by the weight of knowledge, skills and level of responsibility.

Finance assistant
Finance assistants are usually fairly junior positions in the finance department. Staff are responsible for a range of routine data entry and banking tasks. An analysis of salary data shows that finance assistants are typically paid an annual salary of around £18,000. Salary ranges typically start at around £16,000 and rise to a maximum of around £20,000 a year.

Finance officer
Finance officers are expected to assist in the efficient functioning of the finance department. Duties generally involve the preparation of sales invoices, the processing of purchase invoices, cash receipts and payments and the reconciliation of nominal ledger accounts. Finance officers are typically paid around £23,000 a year. Salaries start at around the £21,000 mark, rising to £25,000 at the maximum.

Finance manager
This senior role is usually held by a qualified or part-qualified accountant. Finance managers are responsible for the day-to-day running of the finance department and report to the financial controller, finance director or company secretary. Typically finance managers are paid a minimum of around £32,000 and £40,000 at the maximum. The lowest starting salary for a finance manager in our sample is £23,459 at childcare nursery Hollybank Trust. At the other end, the highest maximum salary of £59,934 is paid at Nationwide.

Visit www.IDSPay.co.uk for further details of the service, and to sign up for your free trial.



Pay prospects for 2010: hopes for a recovery persist despite the economic outlook remaining uncertain

The median pay settlement level for 2009 is 2.3 per cent. Higher-level awards have continued to occur despite freezes numbering around a third of pay settlements. This has created a noticeable division in the distribution of pay settlements: pay freezes on one side and increases at 2 per cent and above on the other. Excluding pay freezes in 2009, the median pay settlement level is 2.9 per cent. Our recent survey of reward specialists shows that three-fifths of those firms that froze pay in 2009 will award pay increases once more in 2010.

Many of the gloomiest predictions on pay made at the start of the year failed to materialise. There were not widespread pay cuts or pay freezes across the board.

Pay freezes are highly sectoral with the motor industry, construction, bulk chemicals, road and air transport and the media particularly susceptible. Sectors which are less affected include energy, finance (though this has been balanced by large-scale job losses), pharmaceuticals, bus and rail transport, food retailing and food manufacture.

In many cases pay freezes have been justified through commitments to safeguard jobs. Firms are conscious of the need to retain a skilled workforce for when the market eventually picks up and are trying to avoid unnecessary cuts.

In a year when deflation emerged for the first time since the 1960s, RPI inflation became much less important as an indicator in pay setting. However as inflation is expected to rise in 2010, the level of RPI will become a key factor in pay negotiations once more, providing an upward pressure on pay. Forecasts published by IDS suggest RPI inflation will return to around 2.5 or 3 per cent early in 2010 and stay around 3 per cent for most of the year.

The IDS Pay Report special issue on pay planning for 2010 is available now. Click here for further details.



Annual leave ruined by sickness can be taken at another time

Although the relationship between sick leave and annual leave has had much attention in recent years, most employees and employers have, until now, regarded annual leave ruined by sickness as unavoidable bad luck. However, in the recent case of Pereda v Madrid Movilidad SA, the European Court of Justice has held that the Working Time Directive gives a worker who is on sick leave during a period of annual leave the right to take the lost annual leave at a different time. The worker has this right even if it is necessary to take the replacement leave after the end of the leave year in which the leave was originally arranged. Under the Directive, every worker is entitled to four weeks of paid annual leave. The Court also confirmed that an employer’s failure to allow a worker on sick leave to take annual leave breaches this right. The decision builds on a previous ECJ ruling that workers on long-term sick leave are nonetheless entitled to accrue annual leave.

Employers have been quick to criticise the ECJ’s decision, citing the cost of providing additional annual leave and potential exploitation by unscrupulous employees who pretend to be sick in order to claim more annual leave at a later date. Employers concerned about the judgment would be wise to review their sickness policies to include a procedure to deal with sickness during pre-arranged annual leave. Most workplaces operate a system of self-certification for short-term illness – employers may feel the need to consider whether such a system remains appropriate for sickness occurring while the worker is on annual leave.

The many and varied issues raised by the Working Time Directive are considered in the IDS Working Time Handbook, published later this month. Click here for further details.

Inflation forecasts

In our latest survey of inflation forecasts, City economists have revised their forecasts upwards and expect RPI inflation to rise sharply at the end of the year to around 2.5 per cent in January, which is when VAT will be reinstated at a rate of 17.5 per cent. RPI is projected to exceed 3 per cent by the second quarter of 2010 and also to exceed the rise in the CPI, restoring the pre-recession relationship between the two measures. The significant rise expected in the RPI is partly due to the weakness of the pound leading to more expensive imports, as well as a likely continued rise in oil and commodity prices at a time when downward pressures from the VAT cut and falling mortgage interest payments fall out of the picture. CPI inflation is also expected to rise, but to stabilise at around 2 per cent for most of 2010.

Click here to sign up for free RPI alert emails.



Unique new employment law title from IDS Employment Law Brief

Over the last 20 years, the number of law firms and barristers sets with an established practice in employment law has grown hugely. Inevitably, this has led to far greater demand for lawyers who can meet the challenges thrown up by so demanding an area of law. A unique new book just published by IDS – Employment Law Practice: Strategies for Success – provides insights into the choices, strategies and skills that distinguish the best employment lawyers, and aims to equip trainees, pupils and newly qualifieds with the means by which they can really make their mark. Written by four experienced employment lawyers, the book will be of value to anyone aspiring to secure a professional edge in their work as an employment lawyer.

Employment Law Practice: Strategies for Success is available now. Click here for more information.



Pay and conditions in engineering

IDS has tracked relatively strong pay growth for manual workers in engineering in recent years. Since 2005, median salaries for semi-skilled workers have increased by around 15 per cent, while most grades of skilled workers have seen salaries rise by over 20 per cent. Our research found a median level of settlements in engineering for the full year from July 2008 to August 2009 of 2.6 per cent, but the median fell from 4 per cent for deals agreed in the second half of 2008 to 2 per cent for the larger number of deals since January 2009. At the same time, the incidence of pay freezes has markedly increased, so that they now account for a third of settlements. Our latest survey of developments in the engineering industries spotlights the impact of the downturn on pay bargaining. The analysis for the report is based on the regular monitoring of pay settlements across the economy and also on the results of a bespoke IDS survey of engineering firms.

Pay and Conditions in Engineering 2009/10 publishes later this month. Click here for more information.



Directors’ pay

Boardroom remuneration practice is now at a crossroads and the next 12 months will be decisive in deciding which way it will go. Will it be business as usual or will mounting pressure for change take it in a new direction? Our latest Directors’ Pay Report shows that boardroom pay is in flux, with salaries going up by an average 8.3 per cent in the past year, but annual bonuses falling by nearly 30 per cent. In response to recession, however, remuneration committees have been taking a hard look at their incentive arrangements rebalancing, recalibrating and restructuring schemes. Looking to the future, there are strong prospects that incentive payouts will bounce back over the next year and beyond as the unintended consequence of falling stock prices on share grants and adjusted scheme targets begin to kick in on the back of an economic upwave.

Directors’ Pay Report 2009/10 publishes later this month. Click here for more information.



Call centre pay and conditions

Despite a weaker economic and labour market outlook, there is still some pay growth for certain key benchmark roles in the call centre industry. Roles focussed on improving business performance, such as supervisors and training managers, report modest growth in pay levels – driven by a need for improved performance and efficiencies during recession - while pay growth for customer service agents is flat. Call centres also report a fall in absence and turnover levels. The newly published Pay and conditions in call and contact centres 2009/10, based on a survey of 140 call and contact centres, analyses pay and benefits in the industry and shows how recruitment and retention difficulties have eased over the last 12 months.

Pay and conditions in call and contact centres 2009/10 is available now. Click here for more information.



In-house lawyers’ pay

While the labour market for private practice lawyers is in turmoil, the recession appears to have had little impact on solicitors and lawyers working in-house, according to our second edition of In-house Lawyers’ Pay Report, published this month. In addition, our research shows that the redundancy rate for in-house lawyers is low as employers focus more of their legal work in-house and try to save on external law firm fees. Like the rest of the workforce, however, salary movements for those still in a job are subdued. The latest report is based on a survey of 80 public and private sector organisations covering 1,100 in-house legal positions and includes detailed pay and reward arrangements for five in-house job levels and an overview of recruitment and retention in the profession.

In-house Lawyers’ Pay Report 2009/10 is available now. Click here for more information.



Managing redundancy

In this recession, unlike those of the past, employers seem to be making considerable efforts to retain skilled employees and limit the need for redundancy. A variety of methods have been employed to cut costs without losing jobs, including natural wastage, redeployment, pay freezes and short-time working. Despite these efforts, over a quarter of a million people in the UK were made redundant in the second quarter of 2009. The new HR Study Managing Redundancy looks at how employers have been seeking to limit or avoid redundancies. It also discusses the key elements of the redundancy process, including making the announcement and handling the redundancy selection process.

Managing redundancy is available now. Click here for more information.



Hours and holidays

There have been few cuts in working hours in 2009, although some firms in the hardest hit sectors have introduced temporary short-time working in response to the economic recession. The average working week remains largely unchanged from 2008 at just over 37 hours. Annual leave too has remained steady at 25 days a year, excluding public holidays. IDS has published an Hours and holidays HR Study every year since 1983. Our 2009 findings are based on a sample of 747 employee groups from 363 organisations and industry agreements.

Hours and holidays 2009 is available now. Click here for more information.

Bargaining and Industrial Relations Prospects for 2010 – A Joint IDS/Acas conference
Thursday 3 December 2009, Central London

Brought to you by IDS and Acas, this essential conference will provide you with an all-encompassing view of contemporary industrial relations, with practical guidance and best practice examples for dealing with workplace change. In just one day you will hear from leading authorities on pay developments over the past year and the key issues and prospects for 2010.

Click here for further details and to book your place.