1. Introduction

The Joint Negotiating Committee for Higher Education Staff's (JNCHES) Framework Agreement for the Modernisation of Pay Structures stated that, following role analysis and the adoption of new grade structures, institutions may need to supplement pay rates for some staff where labour market conditions dictate . This is because role analysis does not take account of labour markets where people with scarce skills and expertise in short supply can command a higher salary than the organisation's normal rates of pay.

2. Purpose of this policy

Following the JNCHES Guidance, this policy and the accompanying procedure and checklist have been designed to ensure that the University:

  • Awards recruitment and market premia in a fair, consistent, transparent and robust manner
  • Complies with equal pay legislation, i.e. has objective evidence of the need to offer different rates of pay to staff whose work is of equal value, and an appropriate mechanism in place for removing premia when they are no longer warranted by labour market conditions
  • Considers and addresses other potential issues and mechanisms to achieve effective recruitment of staff

In order to do this, the policy takes account of:

  • The JNCHES's Framework Agreement for the assimilation of individual staff to new pay structures
  • The Equal Pay Act 1970 and the Equality Act 2010
  • Examples of best practice in improving recruitment
  • Discussions with campus trade unions

This policy provides the mechanisms to address pay related recruitment issues.

3. What are the additional payments covered by the policy?

Additional payments which can be called recruitment/attraction premia or market supplements are payments made in addition to the salary for a specific post, or group of posts. They are paid where other employers' higher pay rates (the market rate), prevent the University from being able to recruit staff on the salary indicated for the role by role analysis alone.

The payments can apply to posts on a temporary or ongoing basis. Should labour market conditions change and market pay rates fall, or where an employee is promoted to a higher graded post or moves to a different post that does not warrant a recruitment premium or market supplement, their entitlement to that payment will be reviewed and the premium may be withdrawn in line with the agreed notice period.

Recruitment premia or market supplements may be applied to permanent and fixed term, full-time and part-time posts.

4.Types of additional payments

The University has several mechanisms for increasing pay rates to overcome recruitment problems. These are:

  • 4.1 Recruitment/attraction premium: a lump sum payment which aids in the initial attraction of staff to a particular role sometimes known as a 'Golden Hello'. This can be made as either a one-off payment upon commencing employment, or in several stages or on an on-going basis to include an element of staff retention.
  • 4.2 Market supplement (short-term): A temporary fixed-term additional payment, paid on a monthly basis in addition to an individual's basic salary in order to bring the total annual salary for the role up to the market rate. This will be expressed either as a percentage of pay or a cash sum.
  • 4.3 Market supplement (long term): an ongoing monthly payment made in addition to the individual's basic salary in order to bring the total annual salary for the role up to the market rate where the relevant labour market conditions are more deep rooted and the need for the premium is not expected to vary significantly in the foreseeable future.

As well as additional premia covered by this policy and awarded on a temporary basis, individuals may also be appointed above the minimum of a pay range (the normal recruitment point), if they have relevant skills and experience which warrant it. This is part of the normal appointment process and is not covered by this policy.

5. Awarding and paying premia

Recruitment premia will only be awarded where there is clear evidence that recruitment difficulties are caused by pay rates being low relative to those offered by other employers for similar posts. This will require managers adequately to consider and implement appropriate non-pay solutions to recruit staff.

The accompanying procedure for determining and awarding market related payments includes a checklist to be used by the Head of Department in conjunction with an appropriate member of the HR Department to ensure all appropriate evidence is considered and to assess whether a premium is warranted. If the HoD believes that it is, s/he will then discuss this with the Rewards Manager who will be able to provide input on previous difficulties in recruitment and market pay issues so that the HoD may make a case in writing to the Director of Human Resources who will consider this in consultation with the Dean or another member of the Remuneration Sub-Group before determining and approving payment.

Where an ongoing premium is applied to a role the value will be determined by the difference between the University's normal pay rate, usually the mid-point of the grade for the post as determined by role analysis (and including the value of allowances and other benefits) and the market rate, as determined by evidence from appropriate sources. HR Advisers will advise on appropriate sources of information.

Individuals will be appointed onto the grade for the role as determined by role analysis. The incremental point on appointment will be determined as normal taking into account factors such as previous experience. The individual will then progress through the increments in the normal way. The recruitment premium will be paid in addition to basic salary, will usually be expressed as a gross cash sum and will be separately identifiable from other components of pay.

Payment of a recruitment premium will not result automatically in payment of a retention premium for staff in similar posts. Evidence for the two cases will be different and must be submitted separately. Recruitment difficulties may be experienced for roles where retention is not a problem once staff are in post and other benefits of working at the University are apparent.

Where recruitment premia are paid on an ongoing basis either for a fixed term or an indefinite period they will be included in calculations for the purposes of other payments such as maternity pay, sick pay and overtime. They will not, however, be pensionable.

6. Reviewing and removing premia

The use of recruitment premia will be reviewed by the Remuneration Sub-Group. The Remuneration Sub-Group will consider evidence on individual cases, provided by the HoD/HR Adviser, and of the effectiveness of a premium in improving the recruitment issue it was designed to address. Where an ongoing recruitment premium has been applied this review will also take account of any increases in the normal pay rate for the post.

The Remuneration Sub-Group will also take responsibility for reviewing the overall effectiveness of the recruitment and market premia procedures, and for monitoring the equal opportunity impact of the scheme.

Ongoing recruitment premia for a role should be reviewed and may be withdrawn or reduced if the reason for them no longer applies. Where this reduction or removal would result in a decrease in an individual's total pay a notice period of three months from the review date will be given of the University's intention to reduce or withdraw the premium. Reduction or withdrawal will then commence immediately and may be staged over a period of up to nine months.

Where a staff member chooses to leave a role which attracts a market premium and takes up a role in the University which does not, the premium will be removed with no notice.

Where a staff member has received a lump sum recruitment premium and leaves the University within two years of that premium being awarded they will normally be required to reimburse the full amount already paid to them.

There is no right of appeal by the individual against a decision to remove or reduce a recruitment or market premium.

7. Cautions

There are a number of issues of which managers need to be aware regarding the use of recruitment premia. These include:

  • Where there are a number of employers competing on pay grounds for staff in a particular area (geographical, specialist field etc) this may merely result in a pay spiral as employers try to out-bid each other for staff.
  • Recruitment premia can create ill-feeling among staff in posts which do not warrant them, particularly staff in similar posts to that for which a recruitment premium has been awarded but who may not be in receipt of any premium.
  • It is critical that the evidence to support the decision to award a market premium is robust. The University may be required to demonstrate that any additional payments resulting in differences between jobs of equal value are justified in line with The Equal Pay Act 1970 and Equality Act 2010.
  • It will always be sensitive to withdraw payments made as an indefinite increase to salary when they are no longer necessary. This may result in de-motivating the individuals concerned, which in itself could affect retention. Nevertheless, the continuing payment of a premium must also be justified in line with the Equal Pay Act.
  • There are limited occasions where a recruitment premium is the most effective course of action to address a recruitment issue. Recruitment problems are often caused by factors other than pay, such as ineffective advertising or unrealistic job design.

8. Summary

If a Head of Department believes that they have a recruitment issue they should contact their HR Adviser who can provide advice and guidance on the most appropriate course of action as well as sourcing appropriate market data.

A checklist has been designed to help Heads of Departments gather the appropriate information to discuss with the HR Adviser.

Any recommended premium will then be agreed via the Director of Human Resources. The Remuneration Sub-Group will be responsible for reviewing and if necessary removing individual premia, and for overseeing the management of the process.

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  • Last reviewed: 20 November 2023