Voluntary sector pay settlements rise

rises for voluntary sector employees have nudged up in line with inflation. At
a median of 3 per cent, they are now on a par with those in the private sector,
according to research published by IRS Employment Review.

is in sharp contrast to last year, when voluntary sector settlements lagged
behind those in the rest of the economy.

survey of pay reviews concluded in the year to 31 August 2003 covers
settlements made in 26 charities and 37 housing associations.

cover about 67,000 employees in total, representing just under 10 per cent of
the voluntary sector workforce nationwide.

findings include: 

Across-the-board pay awards, providing for a cost-of-living increase for
employees, dominate in the voluntary sector. Of the 60 basic awards monitored
by IRS, 43 provide for a cost-of-living rise only, with the remaining deals
incorporating either a performance or competency-based, or market-driven,

The range of settlements is narrower this year, at 1.5 per cent to 6.7 per
cent. This compares with a range of 1.1 per cent to 10.6 per cent recorded last

One-third of the 60 basic awards in the sample are pitched between 3.5 per cent
and 4 per cent, while just four are below 2 per cent.

The headline measure of inflation remains the key influence on wage
settlements, with some voluntary sector employers even applying a formula to
their annual pay award directly linking the increase to the all-items retail
prices index (RPI).

Pay and Benefits
Bulletin editor, David Carr, said: “While low inflation
served as a significant downward pressure on pay deals in the 2001/2 voluntary
sector wage round, higher inflation this year has pushed settlements up. This
year’s awards reflect changes in the sector, as it becomes more responsive to
market drivers. We have seen developments in the way that not-for-profit
organisations reward their staff, through individual performance related pay,
regional differences and market supplements.” 

pay increases have caught up with private sector, it must be remembered that,
overall, voluntary sector staff generally earn less. This pay differential
widens with seniority and may be an area trustees will visit in the future.”

By Ben Willmott

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