Focus: People Management - Coaching session with Stephen Bubb

Q: We are in a financial crisis. Our annual pay review is due in April and the board is saying we should freeze pay. Should I?

A: A difficult one. I guess it depends how serious the crisis is.

If you really are teetering on the brink, then I expect staff would prefer to keep a job with no pay increase than face redundancies or worse.

With the perennial funding and contracting problems in the sector, this is a challenge chief executives face far too often. You have to balance being fair to your staff with the demands of the service you are providing to users and members.

Plugging a gap

Of course, the money you spend on a pay increase could go towards plugging a gap or protecting a service elsewhere. That is just one of the complexities and challenges of a leader's job. So here's some advice.

First, review your financial position very carefully and work out just how much a pay rise would cost the organisation (and remember that inflation is currently running at only 2 per cent).

Second, be transparent. How much have you told your staff about the problems you are facing? Don't think you are being kind by protecting them from the awful truth. They not only deserve to know, but are also are part of the solution to your financial difficulties. People who work in the sector have a strong commitment to their organisations and they will be just as concerned to get a good outcome from this financial crisis as you are.

Third, remember whose decision this is. In my view, this is not a board decision but one for you as you draw up your budget. Clearly, the board will be concerned to see a balanced budget, but if as part of that you are suggesting a small increase, then that is a matter for you.

Finally, check you have all the right financial information.

Do look at other areas where you can be generous with your staff. Remember the totality of the pay and conditions package. For example, have a look at your annual leave and see how that compares with like organisations.

Do you have policies that encourage staff to take study leave, for example?

Are you flexible on working-time arrangements?

Support is vital

Finally, do remember the importance of support for your staff in their professional development. It may be just as important to a member of staff to get support for their course. If you've got an appraisal scheme for your staff you should be picking up on this and doing something with it.

In the end, as the Bible says, "a living dog is better than a dead lion" (Ecclesiastes).

STEPHEN BUBB is chief executive of the Association of Chief Executives of Voluntary Organisations (Acevo). Send your questions to

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