Human Resources

Recruitment & probation

Policy on market supplements

This document is in line with the principles of the Loughborough University JNCHES (Framework Agreement).

The University’s strategy, Building Excellence, recognises that investing in staff is key to its success. Attracting the highest quality staff and being able to retain them is vital to enable the University to achieve the ambitions set out within the strategy.

Whilst the University has a clear and transparent pay policy, underpinned by Hay methodology, it is recognised that at certain times, e.g. when particular skills and expertise are in short supply, it might be necessary to exercise flexibility when determining pay.

The University is committed to equality and to the principals of equal pay for work of equal value and shall not take any action when allocating market supplements that undermines these values. Any market supplements will be applied only where an objective justification can be demonstrated.

There are two types of market supplement; those allocated to a particular role (and therefore applied to all employees occupying that role) and those allocated to an individual. Both have separate procedures which are detailed below. Typically market supplements are only assigned to roles on grade 6 and above. 

Market supplements for roles

Where it is identified that a particular role within the institution is unlikely to attract candidates or retain employees of a suitable calibre due to the grading (and consequent salary levels) for the role, then an appropriate market supplement can be awarded to all individuals carrying out that role.

Cases for Market Supplements for Roles will only be considered in the following circumstances:

  • There must be clear evidence that there are difficulties in attracting staff to the particular role and/or in retaining staff in the role. This could include evidence of failed recruitment exercises or an unusually high turnover rate, for example.
  • Analysis of comparable pay rates for similar roles in other organisations must also be provided.
  • The School/Department must demonstrate what action has been taken to resolve the issue without having to resort to applying a Market Supplement. This could include re-designing the role or the team structure.

The following procedure should be applied in situations where a Market Supplement for a role is requested:

  • The Dean/Director should prepare a short writtenstatement which sets out the following information:
    • The number of staff in the role      
    • A forecast of the budget implications
    • The business case for the supplement
    • An objective justification for deviating from the normal pay arrangements for the grade in order to satisfy Equal Pay legislation
    • The Dean/Director should submit the statement to the Chair of Operations Committee. All cases must also be submitted to the Director of Human Resources.
    • The Chair of Operations Committee (in conjunction with the Chief Operating Officer for applications for a market supplement for non-academic staff) with advice from the Director of Human Resources, will consider the submission and decide whether the supplement should be applied.

Market supplements for individuals

The University recognises that it is sometimes necessary to apply market supplements to an individual’s pay because of their own personal market worth in order to attract or to retain them. It is vital, however, that these payments remain consistent, fair and as transparent as possible in order to ensure compliance with Equal Pay legislation.  The following procedure should be applied in situations where an Individual Market Supplement is requested:

  • The Dean/Director should prepare a short written statement which sets out the following information:
    • The reasons for the supplement, including an objective justification for deviating from the normal pay structure.
    • Any activities undertaken in order to avoid having to apply a market supplement.
    • Details of the individual’s current salary and where applicable evidence of any offer(s) made by another employer.
    • The potential consequences of not applying a supplement.
    • The amount of supplement requested and a justification for this.
    • A short summary of how this impacts on the comparability of the wage structure of the team/department in order to satisfy Equal Pay legislation
    • The Dean/Director should submit the statement to the Chair of Operations Committee. All cases must also be submitted to the Director of Human Resources.
    • The Chair of Operations Committee (in conjunction with the Chief Operating Officer for applications for a market supplement for non-academic staff) with advice from the Director of Human Resources, will consider the submission and decide whether the supplement should be applied.

Principles for Approved Market Supplements

  • The supplement will be referred to in an individual’s contract of employment which will also set out the circumstances under which it can be withdrawn, for example, where an individual’s performance or conduct is deemed to be unacceptable (individual market supplement) or where the rate of pay for the role has fallen into line with the market (role market supplement).
  • The supplement will be reviewed on an annual basis by Operations Committee and can be revoked at any time if evidence shows that the reasons for the supplement are no longer valid. Individuals will receive three months’ notice if their market supplement is to be withdrawn. The Annual HR Report which is submitted to Human Resources Committee will contain details of the number of market supplements paid each year and a report will be submitted to the Remuneration Committee each year summarising the market supplements being paid to staff.
  • If an individual resigns or is dismissed, the supplement will no longer be payable.
  • The supplement will be paid on a pro rata basis for part time staff.
  • The supplement will be paid at the same time as the employee’s normal pay (i.e. monthly or four weekly) and will be identified separately on the employee’s payslip.
  • The supplement will not be subject to the annual cost of living rise effective from 1st August each year.
  • The budget for any supplements must be met from the School/Department’s existing budget.
  • In the event that a member of the Research, Teaching and Enterprise job family who is in receipt of an individual market supplement is promoted, the supplement will be reviewed in line with the new salary.
  • Market supplements for roles may be referred to in advertisements.

 

Anne Lamb, Deputy Director (Human Resources)

November 2016