The Council is committed to the principles of equal pay for work of equal value. The National Job Evaluation and Grading Scheme provides an analytical and non-discriminatory method of evaluating jobs. However, there may be exceptional circumstances, due to labour market conditions, where the evaluated grade results in an inability to successfully recruit or retain suitable staff for specific jobs. Under these exceptional circumstances, it may be appropriate to consider the payment of a Market Forces Supplement as a solution to this problem.
This policy has been developed to ensure the Council has a clearly defined approach to applying Market Forces Supplements when a genuine business need arises. It also complies with the legal requirement that employers have objective justification if they offer different rates of pay to staff whose work is of equal value.
A Market Forces Supplement is an additional, temporary payment to the basic salary of an individual job or specific group of jobs where market pressures would otherwise prevent the Council from being able to recruit or retain staff with a particular skill or group of skills.
The Council views Market Forces Supplements as ‘Risk and Retention’ payments, in that these incentives are provided to employees in critical roles, aiming to retain these highly skilled staff, by compensating them according to job market conditions.
Heads of Service/Assistant Directors must seek the consent of their Management Team member before any investigation can be undertaken (including establishing potential budget provision).
A Market Forces Supplement can therefore only be considered when a comprehensive business case is put forward by a Head of Service/Assistant Director (personal/employee submissions are specifically prohibited) and there has been rigorous evaluation of the evidence put forward. Examples of the type of evidence required are as follows:
The Head of Service/Assistant Director is responsible for compiling evidence in a set format (as outlined above) in consultation with Human Resources colleagues.
The Head of Service/Assistant Director should then forward proposals, including recommendations on the actual value of the supplement to be applied, (up to, or equivalent to a maximum of one grade in the authority’s salary structure), to Management Team for discussion in line with the requirements outlined within this Policy.
Formal delegation for the approval of Market Forces Supplements rests with the Head of Paid Service, who will consult with the Assistant Director of Partnerships, as well as the Chair and Vice Chair of the Human Resources & Council Tax Committee when considering the request.
If agreed, the supplement should be considered for all identical posts and any other relevant post where, for example, supervisory differentials are inappropriate.
The supplement will be payable for two years. If, after 18 months, the Head of Service/Assistant Director believes further payment is necessary due to market conditions, they will conduct another comprehensive review. This review must be carried out no later than three months prior to the anticipated supplement end date.
If the Management Team supports the continued payment of a Market Forces Supplement, a formal report will be submitted to the Head of Paid Service for approval, in consultation with the Assistant Director of Partnerships and the Chair and Vice Chair of the Human Resources & Council Tax Committee.
Withdrawal or variation of Supplement
Should the review identify that there is no longer a need for the payment of a Market Forces Supplement, the HR Team will give the employee three months’ notice that the supplement will be coming to an end, with no right of appeal.
Where a Market Force Supplement is reduced or withdrawn, the Head of Service/Assistant Director will discuss with the employees concerned how the review was conducted and the key findings and market data to explain the rationale for the decision.
If it is agreed by the Head of Paid Service (in consultation with the Assistant Director Partnerships and the Chair/Vice Chair of the Human Resources Committee) that there is a continued organisational need/market justification for a supplement, the employee will be advised to this effect.
This scheme is discretionary and will not become part of the authority’s standard employment terms and conditions for employees. Staff will not be permitted to submit their own case for a Market Forces Supplement, and the application of the Policy is outside of the scope of the Grievance Procedure or any other appeal mechanism.
When Market Forces Supplements are paid, they are time-limited and subject to review.
Market Forces Supplements will be identified separately from basic salaries in all documentation and records, including pay slips.
Market Forces Supplement payments will be subject to the following criteria: -
Where an employee who is in receipt of a Market Forces Supplement moves to another role within the Council that does not attract such a payment, the supplement will cease from the date they start their new role.
It is envisaged that the cost of Market Forces Supplements will be met from service budgets. However, there may be occasion where costs may need to be financed via several routes, as agreed by the S151 Officer (rather than just from the relevant service areas budget), as some service areas would otherwise find themselves severely affected.
Data on all market Forces Supplements will be reported to the Council’s Human Resources & Council Tax Committee on an annual basis to ensure regular monitoring of the use of Market Forces Supplements across the Council.
The Human Resources team will keep a register of Market Forces Supplements in payment and will trigger the review at the appropriate time. As above, all Market Forces Supplements will be subject to Head of Service review every two years on a rolling basis, or earlier, if it is considered that a pay award or market trends close the pay gap significantly. Reviews will require the submission of a further business case, as outlined above.
It is essential that this Discretionary Market Forces Policy be applied with absolute integrity and transparency. Employee confidence in our pay structure would be weakened if decisions were made without sound evidence of a Market Forces issue that could not be resolved in any other way.
Heads of Service/Assistant Directors must take responsibility for ensuring this and that the expectations of staff are not raised unjustifiably.