Implementing approaches to rewarding the workforce that truly motivate and help people throughout their careers and address productivity while helping to manage employment costs.
The LGA Workforce Survey for 2015/16 shows that seven out of 10 councils use annual increments as the system of individual pay progression for the majority of staff. This figure has hardly changed since 2009, suggesting that most councils do not regard the potential extra costs and equal pay risks of more complex reward systems as being effective in terms of driving productivity, or that they do not have the skills and capacity to introduce and manage systems. For many councils therefore, the focus, at least at first needs to be on performance management as well as career development and other non-monetary rewards to ensure they are getting the best value from their staff. Exploration of more complex systems may come later.
The development of modern reward systems is of course closely linked to successful recruitment and retention policies. It is clear from the Outside the Box report that existing employment benefits including current leave, training and career development are not having a great impact on motivation. Turnover rates have increased, so these issues will need to be examined as part of a critical appraisal of the overall reward package.
A key consideration is that employees want to be provided with good help and support throughout their working lives. Councils should look at their whole rewards and benefits package from the major items like the pension entitlement to smaller offers such as retail vouchers as part of an effort to reward people in targeted way that can help them feel more valued. One major development in a number of councils is to offer access to credit union facilities to help with housing costs; this growing initiative is worth exploring.
A number of councils have begun the development of workplace charters to provide clarity for employees on what they can expect. In some cases, these charters are focused specifically on the lowest paid. The LGA will be examining the development of charters with the aim of identifying best practice. The charter approach is one way to put into practice a more focused approach to employee wellbeing as part of an overall reward system. This can form part of an approach to reducing sickness absence where there are persistent problems. The LGA will continue to encourage best practice in approaches to sickness absence across the sector.
Dialogue with staff is very important in managing this sort of development. Surveys and conversations that help identify the things that make people feel properly rewarded can be very useful. Councils should also consider providing total benefit statements as part of a communications effort.
Future pay growth
There is now a great deal of discussion about the future growth of public sector pay. Careful thought is needed across the sector about how to plan for future pay changes. If shortages continue to develop in specialist roles such as planning and building control, reward packages may be needed that focus on these professional roles as well as the lowest paid. The key will be designing jobs and career paths that provide attractive opportunities. Employers will also need to refresh their approach to job evaluation so that new jobs are properly valued and can attract appropriate rewards.
Rewarding new skills
As has been discussed in the section on skills, councils and their partners are consistently concerned about the lack of commercial skills in the workforce. As well as a need for skills development there is a need for career structures and opportunities which give proper incentives for people with in-demand skills to come into and remain in the workforce. Performance related elements to rewards are often costly and difficult to manage in local government and market supplements can only be a partial solution. The key is well-designed jobs and career structures as well as perhaps non-pay benefits and help with personal development. Rewarding skills is an issue that needs further exploration and focus.
Low pay
The future trajectory of pay is closely tied to the introduction of the National Living Wage and the target rate of 60 per cent of median earnings by 2020. The National Joint Council (which brings together employers and unions to negotiate national pay and conditions) is leading efforts to introduce a new pay spine by 2020 which is the best way to ensure legal compliance with the National Living Wage.
Actions for the LGA and partners
- explore and encourage good practice in supporting staff through better career planning and supportive reward structures
- support councils in developing fair and flexible pay structures
- identify best practice in the development of workplace charters that provide employees with a clear sense of what they have a right to expect from their employer
- promote best practice in job design and evaluation
- work with others in promoting local government as an employer of choice through initiatives such as Return to Social Work as well as general promotion of the image of local government