9. Market issues and market supplements
The complexity and diversity of the local authority workforce makes it difficult to get the overall pitch of all remuneration levels attuned to the market. In reality, local authorities are operating in a number of different markets.
There is a regional market and for professional posts, we are likely to be competing with other employers in a wider area. We are in competition with the private and voluntary sectors for some posts, but for others, which are specialist to local government, the main competition is other local authorities.
There is a national market and for most senior professional and managerial roles, where labour mobility is at its highest, we are competing at a national level. For some senior professional posts we are in competition with all sectors, for others, including some senior management roles, the main competition will be other local authorities across the country.
We use intelligence about all these markets to enable us to devise our own market strategy. We aim to pay median quartile for comparable Councils to attract talent but ensure value for money.
The need to set remuneration levels which are attuned to these different markets is often in direct tension with the need to set relative pay levels within the organisation on a fair, equitable and consistent basis.
We have therefore adopted the selective use of market supplements to increase the pay rates for particular posts where there is strong market competition.
The law on equal pay permits the payment of ‘market supplements’ over and above base pay in certain circumstances where an employer needs to offer a higher pay level in order to attract or retain staff.
Where market supplements can be justified, key considerations will be that widespread use of market supplements is likely to vitiate the basis of the grading structure, and may prove expensive.
Therefore, we use market supplements where there is clear evidence that the council’s own pay is significantly lower than the market and there is clear evidence that there are recruitment and retention problems as a result.
Market supplements are reviewed annually and are able to be withdrawn in the event that the external employment market changes so as to make them no longer justifiable and necessary.