Review of the use and effectiveness of market pay supplements

Project report

IES carried out research into the use and effectiveness of market pay supplements and Recruitment and Retention Payments (RRPs) in the public sector.

This report, published by the Office of Manpower Economics, brings together the findings from this research and assesses the effectiveness of these supplements, discusses how they are managed and considers how their use can impact on effectiveness.

The research involved a review of the relevant literature on pay supplements, supported by policy stakeholder interviews and case study examples of the application of each type of supplement. Occupations case studies included nurses and IT workers in four NHS organisations; nurses in the Armed Forces; and social workers in local government.

The tightening of the UK labour market in recent years has encouraged the use of market pay supplements and RRPs for public sector workers, however, the research finds that the use of these supplements has increased in a fairly well-controlled manner, rather than a knee-jerk reaction to staffing crises. The report also offers guidance on the dangers of using pay supplements and offers guidance to public sectors employers on the factors that would support their effective use.

Read a summary of the findings from IES