XpertHR - Employment Intelligence

Graduate recruitment part 3: starting salaries

2008-09-05T07:00:00Z

In the concluding part of our series examining trends in graduate recruitment we look at the changes in starting salaries over the best part of two decades. In 1992 the median starting salary was £13,000. We chart its progression since then.

]]> IRS has been collecting data on graduate starting salaries since the inception of its annual graduate recruitment survey nineteen years ago.

The chart below shows both the upward progression of starting salaries over the period - and the greater spread of salaries now on offer.

What will graduate starting salaries look like for 2008/09? The trend is clearly upwards but it should be noted that the period from 1992 was one of almost continual economic growth for the UK. The prospects for 2008 and 2009 are not looking quite so rosy at the moment.

Find out more: take part in the 2008/09 IRS graduate recruitment survey to get the latest information and analysis on graduate attraction, selection and starting salaries (opens new window).

Last week: graduate attraction 1998-2008

Last fortnight: graduate supply 1994-2007

UK interest rates notch up half a year at 5%

2008-09-04T11:00:01Z

The Bank of England's Monetary Policy Committee (MPC) announced (external website) at midday today that UK interest rates will be held at 5% for a sixth successive month.

]]> This move was hardly surprising. There is widespread agreement among economic commentators that while a cut in rates would be warmly welcomed across most sectors of the UK economy, the MPC is in no position to make such a move when inflation continues to rise (subscription required). Our latest inflation forecasts (subscription required) show that RPI is expected to peak at 4.7% in the third quarter of 2008.

The extent to which inflation expectations might influence pay awards remains a crucial concern for the MPC. "The Bank is primarily concerned about wage and price setters," according to David Page of Investec Securities quoted in a recent article on FT.com.

Latest IRS pay data (subscription required), published last week, showed that the median basic pay award rose to 3.5% for the three months to 31 July 2008, up from the revised figure of 3.3% in June. However, with RPI also rising (to 5%) (subscription required) pay awards are still failing to match the increase in prices.

If you are actively involved in your organisation's pay-setting process, we would like to invite you to take part in the 20th annual IRS Pay and Benefits Bulletin Pay Prospects survey of UK private sector reward practices. Each year, this major study looks in detail at how private sector employers set their annual pay review and reward priorities for the coming year. Taking part in our research allows you to compare your expected pay award and reward practices with those of other organisations. The closing date is Thursday 18 September 2008.

Women now face a "reinforced concrete ceiling"

2008-09-04T10:08:05Z

The traditional "glass ceiling" constraining women's progress in the workplace has been replaced by one made of "reinforced concrete", according to new research (PDF format, 2.6MB) (external website) from the Equality and Human Rights Commission (EHRC).

]]> The fifth annual EHRC report, which tracks the numbers of women in positions of power and influence across the UK economy, suggests that progress has stalled or even gone into reverse in many cases.

For example, the proportion of women:
• in the Cabinet has fallen by 8.7 percentage points over the past year, from 34.8% in 2006 to 26.1% in 2007/08;
• heads of professional bodies has fallen by 8.3 percentage points (from 33.3% to 25%); and
• editors of national newspapers has fallen by 3.8 percentage points (from 17.4% to 13.6%).

However, the survey does find some instances of real (if slow) progress. The proportion of female directors in FTSE 100 companies rose from 10.4% in 2006 to 11% in 2007/08. And the proportion of female chief executives of national sports bodies almost doubled, rising from 6.7% to 13.3%.

As ever, XpertHR offers a wealth of practical resources and legal guidance to help employers deal with gender equality and equal pay issues. These include (subscription required to access each):

• How to comply with the law on sex discrimination;
• How to ensure that employees receive equal pay;
• Equal pay FAQs;
• Equal pay policy and equal pay questionnaire; and
• Equal pay: the legal basics.

REC survey: "Muted" pay growth is good news for some

2008-09-03T07:00:00Z

Following on from its message of doom and gloom for recruiters last month, the latest monthly survey from the Recruitment & Employment Confederation (REC) - XpertHR's coverage of which is published today (subscription required) - offers more positive tidings, after a fashion.

According to REC chief executive Kevin Green: "A positive benefit for the economy is the muted pay growth that the increase in the supply of candidates is creating."

]]> The survey finds that, in August 2008, permanent placements showed their sharpest fall since November 2001, coupled with a record decline in temp placements, At the same time, rises in permanent and temp staff pay were "very modest" in August.

This may not be welcome news to all readers, but it will be music to the ears of the Bank of England's Monetary Policy Committee (MPC), who remain preoccupied with the risk of recent high inflation (subscription required) feeding through into pay awards.

As the latest monthly analysis of whole economy pay awards (subscription required) from IRS notes: "The MPC will monitor indicators including earnings data to assess whether or not above-target inflation is leading to increased inflation expectations and thus upward pressure on wages. As the next pay round gets under way in the autumn, when inflation is still expected to be near its peak, it may be these inflation expectations that dictate whether or not the Bank of England can keep control of wages and prices."

The MPC's next interest rate decision is due tomorrow (4 September), while the next monthly IRS pay trends analysis will be published to XpertHR's pay and benefits homepage (subscription required) on Friday 26 September 2008.

If you are actively involved in your organisation's pay-setting process, we would like to invite you to take part in the 20th annual IRS Pay and Benefits Bulletin Pay Prospects survey of UK private sector reward practices. Each year, this major study looks in detail at how private sector employers set their annual pay review and reward priorities for the coming year. Taking part in our research allows you to compare your expected pay award and reward practices with those of other organisations.

Can retail pay hold up in the current gloom?

2008-09-01T09:35:00Z

As we emerge from the gloomiest August since 1992 (in meteorological terms) (external website), the UK's retail sector has been handed its gloomiest bill of health for a quarter of a century (in high street sales terms). But what impact will this have on pay in the sector?

]]> New research (external website) from the CBI shows that the balance of sales volumes ran at -46% over the three months to August 2008, "the weakest since the survey began in 1983" (Balance figures are calculated by subtracting the percentage of firms that responded negatively when asked about how sales volumes are holding up from the percentage that responded positively).

This is in stark contrast to the unexpectedly upbeat picture painted by recent ONS figures (external website), which claimed that sales volumes rose by 0.7% over the three months to July 2008.

In light of these contradictory data on just how well the sector is performing it remains to be seen how retail pay awards fare when the latest IRS analysis of reward in the sector is published to our pay and benefits homepage (subscription required) next Friday (12 September).

Over recent years, retail pay has shown remarkable stability even as the fortunes of the sector have see-sawed. Last year, our previous annual analysis (subscription required) found that the median retail sector pay award was 3% for ther year to 31 May 2007. The median had therefore held at 3% for each year between 2003 and 2007, with the sole exception of 2006, when it fell back to 2.5%.

Here's hoping the latest IRS findings can go some way towards dispelling the current gloom.

Why it doesn't pay to be a graduate in 2008

2008-09-01T07:15:00Z

Spare a thought for this year's crop of new graduates just now entering a swamped labour market. New research (external website) for the Sunday Times, undertaken by the economics department at Kent University, finds that there is now such a glut of graduate talent available that around one in three members of the class of 2003 are still stuck in non-graduate jobs five years on from graduation.]]> The earnings situation for this group is worsening: their average salary is 40% below what they could expect to receive in a position requiring a degree. This gap has widened from 32% in 2001, "before the market was swamped by [...] young people drawn in by Labour's mass expansion of universities", according to the Sunday Times.

And the situation would also appear to be worsening for those lucky enough to be in graduate roles. IRS has just published its coverage (subscription required) of new research from the Association of Graduate Recruiters (AGR), which finds that over the past year, graduate starting salaries have shown their lowest rate of growth since 2000.

The median graduate starting salary in 2008 stands at £24,500, according to the Association AGR, just 1.8% higher than the median rate recorded one year previously (£24,063).

Colour-blind applicant's sex discrimination claim proceeds

2008-09-01T07:00:00Z

A Scottish employment tribunal has allowed a male applicant who was turned down by the police because he is colour-blind to bring a sex discrimination claim. He is bringing the claim on the basis that the condition is more common in men than women.

]]> Mr Dixon's job application was turned down by Strathclyde Police on the grounds that his colour blindness raised concerns about health and safety and reliability of his evidence. However, an employment tribunal rejected his disability discrimination claim on the grounds that it was submitted more than three months after the alleged act of discrimination.

Mr Dixon later found out that colour blindness is a much more common condition in men than women. A tribunal has now allowed his subsequent claim for indirect sex discrimination to proceed even though it was brought outside the normal time limit, using its discretion to consider claims brought out of time where it is "just and equitable to do so".

It's worth noting that it is unlikely that the most common form of colour blindness, inability to distinguish between red and green, would come within the Disability Discrimination Act 1995. To be covered, there has to be a physical or mental impairment that has a substantial and long-term adverse effect on the person's ability to carry out normal day-to-day activities.

The guidance on matters to be taken into account in determining questions relating to the definition of disability (PDF format, 125K) (on the Equality and Human Rights Commission website) says that it would not be reasonable to regard "simple inability to distinguish between red and green, which is not accompanied by any other effect such as blurring of vision" as having a substantial adverse effect. This is by far the most common form of colour blindness. However, the guidance goes on to state that it would be reasonable to consider "inability to distinguish any colours at all" (a very rare form of colour blindness) as having a substantial adverse effect.

It will be interesting to see what the employment tribunal has to say about the sex discrimination claim. The case is expected to be heard later in 2008, in a joint claim with another colour-blind applicant rejected by Strathclyde Police.

The New Scientist website has an explanation of why colour blindness is more common in men than women.

This month's top 10 HR questions

2008-09-01T06:00:09Z

Many of the most frequently asked questions throughout August concern TUPE transfers and terms and conditions - including whether or not a transferee employer is obliged to continue to pay the mileage rate paid by the transferor, or to increase transferred employees’ holiday entitlement to match that of its existing workforce. Others consider the duty to consult in a TUPE situation, and whether or not a certain number of employees must be affected before TUPE applies.

]]>

Is there any obligation on employers to increase the holiday entitlement of TUPE-transferred staff to match that of their existing workforce?

Where the transferor paid a particular mileage rate to transferred employees, is the transferee obliged to continue to pay them at this rate even though it is higher than its normal rate?

Where an employer suspects that an employee is not entitled to statutory paternity leave what can it do?

What are written particulars and when should the employee receive them?

Is an employee who is requesting flexible working required to demonstrate that the child or adult in relation to whom the application is being made requires a particular level of care?

Is there a minimum number of employees that must be affected before a transfer under TUPE can take place?

What is the time period over which the employer must consult upon the transfer of a business covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006?

The duty to consult in a TUPE situation arises where an employer envisages taking measures in relation to affected employees, but what sort of measures would this cover?

Where an employee who has exhausted all entitlement to sick pay is to be dismissed on grounds of ill health will he or she be entitled to any payment throughout his or her notice period?

Can an employer derecognise an independent union?

Pay awards drop further behind inflation

2008-08-29T07:45:00Z

The headline measure of basic pay awards has risen to 3.5% in the three months to July 2008, according to the latest Industrial Relations Services data (subscription required). However, the gap between pay settlements and retail prices index (RPI) inflation has widened.]]>

This is a quiet period in the pay bargaining calendar, and deals effective during April, the busiest month in the bargaining year and including many of the public sector pay awards, have dropped out of the analysis. The figures are now dominated by settlements covering large numbers of employees in the construction sector. The Construction Industry Joint Council, covering 500,000 workers, has awarded a 6% increase.

While private sector pay awards for the 12 months to the end of July stand at 3.5%, the figure for the public sector is 2.5% for the same period.

The inflation figures released on 12 August revealed that RPI, the measure favoured by most pay-setters, had risen to 5% in July 2008, up from 4.6%.

As we noted last month (subscription required), pay awards have been below the rate of RPI inflation for more than two years. This pattern continues, and the gap between the median pay award and RPI inflation has widened to stand at 1.5 percentage points.

Although there has been a slight increase in the median pay settlement in the three months to the end of July, rising unemployment (up 60,000 in the quarter to June 2008) and increasing job insecurity mean that there is unlikely to be increased pressure on wages in spite of higher inflation.

If you are interested in the factors that will shape the wage bargaining environment over the coming year, you can now take part in our annual pay prospects research. Respondents will receive a full copy of the forecasting report when it is published in October.

Graduate recruitment part 2: attraction

2008-08-29T07:00:00Z

To continue our series looking at trends in graduate recruitment we now turn to the mainstay of any recruitment campaign: candidate attraction. Here we reveal the most effective ways of reaching candidates as selected by employers over the past nine years.

]]> The annual IRS graduate recruitment survey has been investigating effective attraction methods since 1998. The table below lists the method chosen to be the most effective by the largest number of employers in a given year.

The internet has rapidly overtaken more traditional forms of advertising - although these are still widely used. Interestingly, the internet was the single most widely used medium of attraction as far back as 2001. It took another five years to be rated as the most effective.

Most effective attraction method (1998-2008)
1998/99	Vacancy directories/bulletins
2000/01	Vacancy directories/bulletins
2001/02	Vacancy directories/bulletins
2002/03	Campus visits (eg milk round)
2003/04	Campus visits (eg milk round)
2004/05	Sponsored students
2005/06	National newspaper advertisements
2006/07	Internet site that carries more than one organisation's graduate vacancies
2007/08	Internet site run by/for the organisation
Source: IRS annual graduate recruitment surveys. Data not available for 1999/2000.

Last week: graduate supply 1994-2007

Next week: graduate starting salaries 1992-2008

Next month: take part in the annual IRS graduate recruitment survey. You can sign up to be notified of its launch by completing the form on the IRS research website (opens new window) and including 'recruitment' or 'pay and benefits' in your areas of interest.

What will pay settlements look like in 2009?

2008-08-28T15:08:11Z

Pay rises are currently worth a lot less than the increase in prices, but how long can this continue? As headline inflation is forecast to fall significantly in 2009, can employees expect to see pay rises at least matching inflation next year?

]]> IRS Pay and Benefits Bulletin is conducting a major survey of UK private sector employers' practices in setting their annual pay review and reward priorities over the next year. Taking part will allow you to benchmark your expected pay settlements and will enter you into a prize draw.

At a time of high inflation, yet low economic prospects, getting the remuneration of employees right is a balancing act.

Taking part in our research will help you think about the tools to use, as well as allow you to compare your expected pay award and reward practices with those of other organisations.

Taking part in our confidential survey ensures that you will receive a complimentary copy of the research report when it is published in October. You will also be entered into a free prize draw with £25 Marks & Spencer vouchers going to the first three names drawn.

Take part in the pay prospects survey here.

Averages and percentages: don't be a statistic

2008-08-27T15:59:27Z

Why do most of us earn considerably less than the "average" salary? Do statisticians really know whether our GDP is growing or shrinking - and, by extension, whether or not we are in a recession? Perhaps they stand outside every factory and office and "count" the output.

]]>
If you haven't stumbled upon it yet, the BBC is running an excellent series of articles on the uses and abuses of statistics, with a series of "lessons" on averages, percentages and similarly slippery concepts.

The writing is incredibly simple to follow - including, for example, an excellent explanation of why it is that most of us have slightly more than the average number of feet.

It's probably a fact that eight out of ten HR practitioners have problems understanding statistics - a number as true now as it was when I first made it up.

So, if you need to use surveys and statistics in your job, even peripherally to inform decisions, and feel you should have paid rather more attention in GCE (or GCSE, according to age) maths classes, you could do worse than to start here.

Fake sick notes being sold on internet

2008-08-27T09:08:53Z

As if employers don't have enough to contend with in terms of sickness absence, another issue has been highlighted recently: websites selling fake doctors' sick notes.

]]> According to the The Daily Telegraph, the fake sick notes can be bought for £25 and are, by all accounts, extremely convincing. They set out the illness chosen by the buyer, the number of sick days required, and details of where and by whom the employee was "treated". They are also headed with the NHS logo and are marked with the NHS stamp.

Reports suggest that the websites, which contain detailed disclaimers stating, for example, that the fake sick notes are "novelty items and not for any illegal purpose", aren't doing anything illegal. However, the NHS Counter Fraud Service has said that anyone caught using fake sick notes is open to prosecution (something worth stressing to employees, perhaps in sickness absence policies). Employers that think they've been subjected to a fraud can contact the NHS Counter Fraud Service, which has a helpline for reporting frauds involving the NHS.

The story has also been picked up by the press in Australia, New Zealand and Ireland, as falsified sick notes from these countries are also being sold.

Graduate recruitment part 1: supply

2008-08-22T07:00:00Z

With autumn just around the corner the time has come to start thinking about graduate recruitment for 2008/09. In the first part of a series we briefly review one of the basics of any labour market: supply.

]]> Using data carefully gathered by universities and the Higher Education Statistics Agency (external website) we have illustrated the basic trends in graduate numbers since 1994.

The total number of graduates is up by over a quarter during the timespan shown. The proportion of students achieving first and upper second class degrees has also increased. Both of these trends have obvious implications for graduate recruiters.

Note: data is available prior to 1994 but it is not comparable with the HESA data shown above. The 1992 reorganisation of higher education is an important factor. For example, the Central Services Unit listed the total number of graduates in 1992 as 148,037.

Next week: graduate attraction 1998-2008

Later this month: graduate starting salaries 1992-2008

Heyday retirement opinion due in September

2008-08-21T07:39:06Z

HR professionals should highlight 23 September 2008 in their diaries: that's the date that the Advocate-General's opinion on Heyday's challenge to the default retirement age is due to be given.

]]> In one of the most significant employment cases of recent years, the National Council on Ageing, which operates under the names Heyday and Age Concern, is arguing before the European Court of Justice (ECJ) that the default retirement age in the Employment Equality (Age) Regulations 2006 is incompatible with the Framework Directive. The default retirement age allows employers to retire individuals at 65 or over.

All tribunal claims of age discrimination relating to default retirement under the Employment Equality (Age) Regulations 2006 have been halted pending the outcome of this decision.

It is often said that the ECJ follows the Advocate-General's opinion in the majority of cases, so the opinion should give some indication about which way the case will go when the ECJ gives its final ruling, possibly by the end of 2008.

If the ECJ decides in Heyday's favour, the Government will be obliged to amend its age discrimination legislation and UK employers will no longer be able to require their employees to retire at 65 without the prospect of tribunal claims.

Read more about the timetable for the case on the Heyday website.