With the stubbornly high inflation levels set to continue and the cost of living crisis getting worse, many members of staff are now realising that the headline pay increases announced at the end of last year were really hiding a massive pay squeeze. In its recent Report and Accounts, Lloyds announced that its total pay spend for 2023 would be “materially lower” than the headline pay increases implied at just 6.3%. That at the time when the retail price index definition of inflation is running at 11.4%.
As part of the 2023 pay deal – agreed with the in-house staff unions – Lloyds said that it would consolidate the 4% Flex allowance and GPS bonuses into pay as follows:
|Grades A-C||4%||Flex allowance|
|Grade D||9%||4% Flex allowance + 5% GPS plan|
|Grades E-G||14%||4% Flex allowance + 10% GPS plan|
Lloyds recently announced changes to its pay ranges but those don’t reflect the consolidation of allowances and bonuses for Grades D-G staff that will take effect from 1st July 2023. As the table above shows, those staff will see between 9% – 14% of their variable pay [members shouldn’t forget that this is not new money] consolidated in to basic pay but the pay ranges are only moving by 7%-9%. What that means in practice is many thousands of staff will find themselves higher in their pay ranges and, over time, future pay increases will be reduced accordingly. The Group’s stated policy is to pay higher awards to those in the lowest grades or those staff who are paid lower within their pay ranges.
It’s a clever trick by Lloyds because what it’s doing is using variable pay [Flex and GPS Bonuses] to position its staff in the ‘market’ and ‘market plus’ zones without paying them any new money. And the piece de resistance is that many of those staff in the ‘market’ and ‘market plus’ zones will get smaller pay increases in future. The consolidated awards will wither on the vine.
What’s surprising is that the in-house staff unions didn’t insist that the pay range movements matched the consolidated pay increases for all grades. It’s unforgivable. Accord has said that: “Overall, this is good news and another example of the unions working with LBG to jointly deliver positive outcomes”. It’s not good news for many thousands of Lloyds staff. And to talk about “working with LBG” and “positive outcomes” when the union has not said anything about hybrid working or compressed working since the announcement was made at the end of April is beyond parody.
Lloyds needs to explain why its treating Grades D-G staff differently? If it can’t explain its position, then it needs to revisit the pay range movements immediately.