Professional December 2017/January 2018

Reward news

Living wage increases AT LEAST 150,000 UK workers are set for a pay rise as the new living wage rates rise to £8.75 around the UK and to £10.20 in London. The UK hourly rate has increased by 30p and the London hourly rate by 45p, representing a 3.6% rise in the UK and 4.6% rise in London. The living wage rates (which are not to be confused with the statutory national living/minimum wage) are independently calculated, based on the real cost of living in the UK and London. The Living Wage Foundation, which announced the new living wage rate, has also announced that Heathrow airport will become the first living wage airport. Over 3,600 employers across the UK, including a third of the FTSE 100, household names IKEA, Aviva, Nationwide, Chelsea and Everton Football Clubs and Google, as well as thousands of small businesses, have chosen to pay the real living wage to ensure all staff, including onsite contractors, earn a wage that meets the real cost of living. More than 1,000 employers have signed up to pay the real living wage since Living Wage Week last year. New research published by KPMG show that 5.5 million people across the UK are still paid less than the real living wage – that’s one in five workers, 21% of the UK workforce. Radon IMPENDING CHANGES to the Ionising Radiation Regulations 1999 mean that from February 2018, employers will have to adhere to a new lower radon exposure limit of 300Bq/M3 in the workplace, replacing the current 400Bq/M3 threshold. Organisations will need to pursue testing and remediation in the first instance and will only be required to notify the Health and Safety Executive once remediation shows that levels cannot be reduced below the new limit. Ian Mitchell, a principal consultant at Bureaus Veritas, commented: “For years, we’ve come to know carbon monoxide as the ‘silent killer’. The reality is, however, that as the second leading cause of lung cancer in UK, radon exposure presents a much more pressing danger.”

Employee resignations RESEARCH FROM XpertHR shows that one in seven (15.5%) employees resigned from their job in 2016, with labour turnover statistics revealing that the resignation rate has increased steadily since 2012, when it stood at 10.6%. Human resources (HR) has the fourth highest voluntary resignation levels out of the groups measured, with rates standing at 8.2% up from 7.4% in 2016 and 6.3% in 2015. Total labour turnover (which covers all types of departures, including voluntary resignations, redundancies, dismissals and retirements) stands at an average 23% and a median of 19.4%, a modest increase from 2015 – when the average was 21.5% and the median 18.5%. In HR the labour turnover is the third highest at 12%. The research supports the movement of organisations like Adobe and Microsoft that have replaced annual appraisals in support of real-time performance management which has brought improved morale, a reduction in staff attrition and significant time savings for managers. Annual appraisals RESEARCH COMMISSIONED by MHR, a leading UK provider of human capital solutions, reinforces the belief that annual appraisals are outdated. Of those employees who have had an appraisal at their current job, 54% describe them as pointless or time-consuming and 52% say they are stressful or difficult. Managers and employees alike deem appraisals cumbersome. Just 14% of respondents said that appraisals provide all the support they need to evaluate their work and plan their career development. Julie Lock, service development director at MHR, says: “How often have you been set objectives at the start of the year to look back on them at the end of the year to find they are totally different? 62% of respondents to our research said only some, or none, of their previous objectives were still relevant at the point of their appraisal. “Modern appraisals should focus on setting short-term objectives, closely aligning employee targets with business goals in order to make the process beneficial for both the employee and the business.” ECA’s annual Salary Trends Report analyses current and projected salary increases for local employees in 71 countries across the world. Lowest salary increases in Europe ACCORDING TO the latest Salary Trends Report by ECA International (ECA), UK employees in the private sector are expected to see a real salary increase of just 0.2% in 2018, the equivalent of approximately £4.41 a month for the average worker before tax (based on average salary of £26,364 published by the Office for National Statistics). This keeps the UK at the bottom of the salary increase table in Europe, ranking 23rd out of 26 countries surveyed in the region. Employees in the UK received 0.1% real salary increase this year, lower than forecast in 2016 (0.3%), due to a jump in inflation caused by sterling’s fall in value.

Chart 1: All employers

Average Median


Total labour turnover rate (n=275)


Total labour turnover rate foremployees with less than12months’service (n=143)




Voluntary resignation rate (n=200)


Voluntary resignation rate foremployees with less than12months’service (n=132)



%ofemployees 0% 5% 10% 15% 20% 25% 30%

One in ten (10%) of new starters resigned before completing a year’s service – with total turnover for all reasons at 11.4%. Companies in the services sector had the highest rate of attrition among new starters: on average, 11.6% new employees left voluntarily in their first year, with total labour turnover at 13.1%.

| Professional in Payroll, Pensions and Reward | December 2017/January 2018 | Issue 36 30

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