Strikes v Negotiation: lesson for the job seeker

Thursday, June 30th, 2011 - job seeking, Recruitment Process, salary negotiation, tutorial


Strikes v Negotiation: lessons for the job seeker

Don't Work and Fight Back

Today’s UK public sector strikes about pension rights seem to have garnered some sympathy, but little solid support amongst the present generally down trodden and high taxed British public. We only have to look at the recent plethora of Administration announcements for the High Street to know that the once driver of the British economy over the last 15 years – the shopper – now has to worry about job security and rising energy bills to not necessarily need some of those trinkets of the past, or will actually go back to make do and mend.

But there are some huge lessons here for the job seeker, and it is those that I want to pick up on.

Why strike?

Today’s strikes are about pension rights. As an ex-union representative, I was always told by the knowledgeable branch secretary that striking was a last resort, and only ever undertaken to protect contract rights and safety. So is this strike an issue worth striking about?

Yes, pensions are a core contract issue, and from mid-2012 all employers will have to0 provide a pension scheme for their employees. I actually find it quite frightening that in the 21st century some employers can get away with this, but at last this loop hole will be closed. So perhaps their is core legitimacy in this strike?

That’s where the economic argument of reality comes in. While public sector pensions are still most often final salary based, most private sector pensions are now based on contributions. The new legislation from 2012 will start with a 3% scheme, moving up over three years to a total 5% scheme. Be aware that in Australia, its a 10%+10% scheme for 20% per annum, and most financial experts think a lifetime of 10% total contributions is a minimum payment for a decent liveable pension. But when 5% is what most private sector workers will be used to, paid at the age of 67 by 2018, why should public sector workers be allowed to retire 7 years earlier on a better amount?

I have hence have great personal sympathy for low paid government workers – those below £15,000, which Danny Alexander has stated will be protected – but teachers who are now paid on average 50% more than the average public sector worker must logically have less leeway with the voting public parents than they think.

Pay or package?

This is a subject I keep returning to, but when you get the offer of a new job, what is it that you read first: the base pay or the total package?

I keep saying this, but it still doesn’t seem to get through to most job applicants. Think about total package over just the base pay. Pay is most often centrally defined by an HR policy, and will be defined within limits against a grade/budget. However, there are soft things in a package, which you can negotiate in when agreeing a job offer:

  • Bonuses
  • Training
  • Attending conferences
  • Holidays
  • Medical benefits (who – just your children to age 16?)

But most important of all probably is pension contributions. Taxable benefits on pensions for companies are clear, and fully tax deductible. So if you want to upgrade your pension from 5% to say 10%, then an prospective employer in job offer mode will be more willing to do this than an existing employer in cost review/annual review mode.

As the job seeker, and now successful job applicant, you have so much ability to flex your package, you might as well use it – or lose it! Good Luck!

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