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The pay penalty facing small firms

The pay penalty facing small firms Editorial comment The pay penalty facing small firms this yardstick. It's tempting to assume that any As a result of a major recruiting drive measure designed to hold down wages Job attraction is governed less and about 18 months ago, Perkins not only will be enthusiastically supported by less by the size of the wage packet, and overcame its skilled labour shortage but employers, while the most that can be more by the amenities which the was also able to compile a waiting list of expected of employees is grudging employer can offer. It is then that small 30 would-be employees, ranging from acceptance. firms can find themselves in trouble. machine tool fitters to electricians. Quite simply, company a is hard put But Britain's 1¼ million small firms Ruff explained that many newcomers — each with fewer than 200 employees, to recruit an extra two or three men to to Peterborough joined firms who had and many employing well below that its 30-strong payroll if it can't offer not long established themselves in the better wages than company b which is number — must be apprehensive about city. big enough to have a works canteen, pay controls continuing for a further 12 "Initially, they are attracted by rates social club and a sports centre. months. of pay, but later they look to companies Complaints about the extent to In a depressed economy, perks such such as ours because of our amenity which the £6 a week agreement as these are of no great importance. Men value — sports clubs, canteens, pension squeezed differentials have been well are thankful enough to have a job — schemes, and so on." aired. The contents of the phase two even though they are working for a firm But it's not only in the amenity package have been designed, hopefully, which doesn't provide subsidised beer in league that the big company can over- to restore some measure of reward for the social club. shadow smaller employers. effort and skill, though not to the It should not be forgotten that the But a wage control policy, coupled extent that the TUC or the employers phase one pay agreement allowed for £6 with the hoped-for economic recovery, would have preferred. a week maximum increases, and is likely to result in small firms finding Differentials apart, there are other employees who got the maximum it harder to attract labour, particularly problems inherent in a policy which tended to be members of the big plant in the skilled sector. makes no distinction between big and unions. Already, there are reports to suggest small firms. So, with inflation continuing to that small firms have had difficulty in threaten real earnings, it's in the bigger The attractions of working for a labour recruitment, even though the last company that men are likely to obtain particular company — discounting such 12 months have been dominated by un­ more of the benefits provided under the peripherals as "getting on well with the employment. new agreement. boss" and "it's only a short walk from The CBI, sifting through a mass of All this means that small firms are home" — have traditionally centred on conflicting accounts of labour availabil­ placed in the untenable position of pay. ity throughout the country, have having to provide facilities comparable pointed to this as one of their few firm with big companies, but with fewer Wage levels, by and large, have deter­ conclusions. resources. mined whether an employer contributes Meanwhile, in Peterborough — one of It's yet another example of the to a newspaper's sits. vac. columns or the overspill towns — the situation was industrial tug-of-war, and there's puts a "full up" notice on the factory put on a more identifiable footing by precious little sign that the Government gate. Ken Ruff, recruitment manager of the intends to do anything about the mis­ But a Government-directed pay curb area's largest employer, Perkins Engines. match. ■ serves to undermine the importance of INDUSTRIAL MANAGEMENT http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Industrial Management Emerald Publishing

The pay penalty facing small firms

Industrial Management , Volume 76 (6): 1 – Jun 1, 1976

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0007-6929
DOI
10.1108/eb056634
Publisher site
See Article on Publisher Site

Abstract

Editorial comment The pay penalty facing small firms this yardstick. It's tempting to assume that any As a result of a major recruiting drive measure designed to hold down wages Job attraction is governed less and about 18 months ago, Perkins not only will be enthusiastically supported by less by the size of the wage packet, and overcame its skilled labour shortage but employers, while the most that can be more by the amenities which the was also able to compile a waiting list of expected of employees is grudging employer can offer. It is then that small 30 would-be employees, ranging from acceptance. firms can find themselves in trouble. machine tool fitters to electricians. Quite simply, company a is hard put But Britain's 1¼ million small firms Ruff explained that many newcomers — each with fewer than 200 employees, to recruit an extra two or three men to to Peterborough joined firms who had and many employing well below that its 30-strong payroll if it can't offer not long established themselves in the better wages than company b which is number — must be apprehensive about city. big enough to have a works canteen, pay controls continuing for a further 12 "Initially, they are attracted by rates social club and a sports centre. months. of pay, but later they look to companies Complaints about the extent to In a depressed economy, perks such such as ours because of our amenity which the £6 a week agreement as these are of no great importance. Men value — sports clubs, canteens, pension squeezed differentials have been well are thankful enough to have a job — schemes, and so on." aired. The contents of the phase two even though they are working for a firm But it's not only in the amenity package have been designed, hopefully, which doesn't provide subsidised beer in league that the big company can over- to restore some measure of reward for the social club. shadow smaller employers. effort and skill, though not to the It should not be forgotten that the But a wage control policy, coupled extent that the TUC or the employers phase one pay agreement allowed for £6 with the hoped-for economic recovery, would have preferred. a week maximum increases, and is likely to result in small firms finding Differentials apart, there are other employees who got the maximum it harder to attract labour, particularly problems inherent in a policy which tended to be members of the big plant in the skilled sector. makes no distinction between big and unions. Already, there are reports to suggest small firms. So, with inflation continuing to that small firms have had difficulty in threaten real earnings, it's in the bigger The attractions of working for a labour recruitment, even though the last company that men are likely to obtain particular company — discounting such 12 months have been dominated by un­ more of the benefits provided under the peripherals as "getting on well with the employment. new agreement. boss" and "it's only a short walk from The CBI, sifting through a mass of All this means that small firms are home" — have traditionally centred on conflicting accounts of labour availabil­ placed in the untenable position of pay. ity throughout the country, have having to provide facilities comparable pointed to this as one of their few firm with big companies, but with fewer Wage levels, by and large, have deter­ conclusions. resources. mined whether an employer contributes Meanwhile, in Peterborough — one of It's yet another example of the to a newspaper's sits. vac. columns or the overspill towns — the situation was industrial tug-of-war, and there's puts a "full up" notice on the factory put on a more identifiable footing by precious little sign that the Government gate. Ken Ruff, recruitment manager of the intends to do anything about the mis­ But a Government-directed pay curb area's largest employer, Perkins Engines. match. ■ serves to undermine the importance of INDUSTRIAL MANAGEMENT

Journal

Industrial ManagementEmerald Publishing

Published: Jun 1, 1976

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