In balloting on pay offers we have asked in the past for your comments if you are rejecting the offer made. We have been looking at the comments this year and have pulled together some themes around the negotiations and offer that we hope will help clarify our position.

Previous year’s deals
• Any annual pay deal is unlikely address previous year’s deals which may have been below inflation. It is a snapshot in time of both the economic position in general, and affordabiltiy for the company to ensure the business is sustainable.
• Historically, we have achieved above inflation deals, which gradually address this.

Pay comparison

Inflation
• We use CPI as the rate of inflation in our talks. Some public sector unions have RPI stated in historical agreements, but very few.
• We use forecasts from many sources for the year ahead and not the ‘live’ figures for the November/December period of talks.
• CPI is currently 3.4% (CPIH is 3.8%), so while the pay settlement may have been below inflation at December’s 4% rate (and compared through the year), it is now above inflation.
• Forecasts for 2024 by most economists show inflation will be somewhere between 1-3% by December 2024.

Discretionary Pot
• Members have been keen for there to be a way to move up the salary broad band, and this was a part of the new Contracts and Levels structure which was put forward by NHBC and accepted by all staff.
• The discretionary pot will in this year largely adjust for discrepancies in salary caused by the implementation of the second year of that restructure.
• We are in talks over how any future discretionary element may be allocated to reward high performance, and we are initially confident that there is a high level of oversight from Heads of Department through to HR to ensure that there are no biases.

Median pay
• NHBC have said in talks that their intention is pay at the median level. This is not a contractual right.
• We always look at the ‘live’ median pay data from the HMRC website. Headline reports are often for all employees, where the HMRC does allow us to look at the Finance and Construction sectors, which show a great deal of difference. 2016-2024 for finance shows a 44% increase in median pay where construction lags with only 25% increase.
• The median salary increase for the whole economy shown above is 35%, which, coincidentally, is around the average of the figures for finance and construction sectors.

Timing
• We negotiate in November/December so that any pay increase can be implemented in April.
• Previously, we negotiated later for a July implementation.
• Whenever we negotiate we will always be using forecasts on the future, which may or may not be correct.
• Examples of this are recent – 2020 for Covid and 2022 for the Ukraine war. Both happened after negotiations had taken place and could not have been predicted, but had very large impacts on cost of living and pay.

Ballots
• The ballot on the offer is a key moment for members to express their opinion.
• Your negotiating team do not make any decision on whether to accept or reject an offer. We have recommended acceptance to members and, at times, we have remained neutral, leaving the decision to the members.
• The offer that goes to ballot has not been accepted at that time.
• The ‘No’ vote this year was the largest we have had since we started balloting on the pay offer in 2017.
• Should we ever have a pay offer rejected at ballot we will return to the negotiating table to try to improve any offer, but ultimately members must be mindful that a ‘No’ vote is likely to require further ballots, perhaps on industrial action.
• Members must remember this point. If you vote ‘No’ to any offer, and then vote ‘No’ to industrial action, this really leaves us in a difficult position.
• Saying this, I do not believe that we will ever be in a position where we have to arrange a ballot on action.

Joint Comms
• We have had comments that the issue of Joint communication with NHBC may give the impression that the offer has been agreed. This is not the case.
• The communication always says it is subject to ballot of SA members, and we have indicated in the past whether we recommend acceptance or remain neutral. This year we remained neutral.
• We will take this feedback on board. Next year we perhaps will not issue a joint communication when going to ballot, and may do this later, following the ballot results.

Profits at half-year
• We had several comments on the half-year profits reported by NHBC.
• Clearly any pay offer has to be sustainable, and profits driven by investments returns can be wiped out as quickly as they appeared in the accounts.
• The figures were not available to us when we started negotiations, only being announced as we went to ballot. However, we would always look deeper than the headline, to operating profit which this year was weaker.
• Profits are, of course, a gateway measure on the NHBC Bonus Scorecard, so may affect total reward.
• In the past, NHBC have made pay offers even when a loss has been made, though this cannot be guaranteed.

Workloads
• There were a number of comments on individual workloads, which cannot form part of a pay negotiation.
• If you have concerns over your workload then please raise this with your line manager.