Staff salaries: Handling wage inflation and salary bandings


Managing expectations around wages requires transparency so that people understand fair pay and the path ahead, an awareness of individual motivations and for teams to be outward and well as inward-looking, so that they see salaries in context of what’s happening in the world around them.

You’ll learn:
•    About how personal values drive what staff members expect from their salary package
•    The benefits of payscale transparency
•    Why it’s important to help employees understand market forces and the impact these have on business

Expectation management, in an industry that is still evolving to better prove its value, has long been important. We’ve covered the shifts in client expectations, but the management of expectations around staff salaries continues to be a direct and pressing one, with a battle for talent prominent across agencies and in-house departments.

In many ways, plus ca change; most people will always push for more, particularly when they work for a time and expenses-driven, people-focused business or team. Yet expectations are not as simple as they used to be, meaning there are far broader considerations, and these will probably continue to diversify.

The reality is that we don’t just work in a fast-changing sector, we live in a fast-changing world. Which means that expectations around wages in communications have to be assessed and managed in the wider context of the economy, of employment, but above all of the values that individuals hold dear, which is the most direct driver of their motivations and aspirations around what they earn.

Shifting values

Consider this: I started a full-time job in the summer of 1992. The UK was still trying to claw its way out of a recession that began in 1989 following the heady years of the mid-1980s. People were chasing roles, desperate to get a first foot on the ladder and happy to land a job. But a few months in, I was eyeing the next rung on the ladder, plotting a course for the next few years of multiple promotions and responsibility conventionally beyond my years. And I’d been to see a mortgage broker.

Yes, I was trying to save for a deposit and buy my first home. Home ownership mattered to me, because I valued it highly. Roll forward the clock a few years and ahead of making account director at a London agency I bought my second home, a London flat.

Compare that with the landscape of aspiring, rapidly-rising communications professionals today. They have sky-high rents, living costs jumping up and an uncertain economic outlook, compounded by Brexit and a sector that is adjusting to rapid transformation. Motivations are clearly different on the first few rungs of the ladder, when the prospect of home ownership seems unrealistic, particularly for those living and working in London.

This is just one example of how values have shifted as work and economic realities have moved on. But it points to a broader picture of shifts in values between generations. My lot were 80s kids, entering the market in the shadow of the still largely vacant Canary Wharf, desperate to claw their way upwards. Today, values have changed, and there are indications that young people likely to enter the workforce in the next few years will be even more concerned with family, enjoyment and the contribution they make to society [1], and less so with what they earn.

Even, fair and clear

These values and motivational factors are what they are, a by-product of society and the economy that the communications business can do little about. What employers can get a grip on though, in managing expectations, is what they should really always be doing anyway - respond to those values and beliefs with an approach to remuneration that is even, fair and above all clear.

One of the things that senior managers can often forget is that while they may have full visibility over what people get paid and what salaries are allocated to different job levels, at the more junior levels, where the war for talent can be equally frenetic, many people simply don’t know what they can expect to be paid at the next rung up, or once they’re much further up the ladder. And reliance on hearsay can be a very dangerous thing.

For their own financial performance management, businesses of course need to work to salary scales. While many of us will have seen exceptions to that rule – agencies, for example, where rises and pay grades seem to sometimes be allotted arbitrarily – the reality is that attracting and retaining talent while running a profitable people-based business depends on having a realistic salary scale that governs what people get paid at different levels. And as the conventional hierarchy continues to diversify, with more varied job titles reflecting a more varied media and communications landscape, that becomes more challenging.

Clarity, to a point

Whether agencies and in-house departments choose to make those bandings public is another matter. Most will reveal to individuals what the salary range is at their current level, and being clear on the next level up, as the carrot is dangled, is typically good practice too. Some go as far as publishing the entire salary scale internally, which while perhaps commendable is trickier for larger businesses and even more complicated as job roles diversify and the scope of earned, paid and owned media services expands to the point where comparing apples with apples pay-wise becomes unfeasible.

Whatever the desired approach though, it’s important to ensure that salary scales are reviewed regularly so that they keep pace with market progress and competitive forces. Industry bodies publish them based on market data, as do recruitment firms, but in my experience these vary pretty widely, and conversations with peers who have an ear to the ground is a better way of assessing what’s current and how things might be shifting.

The real world

The reality, of course, is that salaries and salary inflation in communications will always have some parallels with roles in other walks of business life. We do not work in an industry where mega-bonuses froth the picture in boom years, or where the demand for talent gives rise to an unrealistic escalation in what people can get paid for the value they provide. If the economy is tight, there will likely be a knock-on effect in many areas of communications, and those tailwinds can be felt at resourcing and salary levels in communications, naturally. We get paid real world salaries, on the whole.

Equally, employers need to ensure that their teams understand the market forces and commercial imperatives that shape how much they get paid, and how much they can get paid in the future. Growing businesses create more opportunities for the people who work for them. Services that hold greater value have the capacity to be charged at correspondingly higher prices, meaning those who create higher value stand to share in the spoils. 

Rapid economic growth creates new openings and new possibilities, which can enhance earning potential and accelerate career development. Inflation – while near-nil in the UK for some years now – can be a negative pressure unless it corresponds with market and fee or rate growth.

Equally, uncertainty, stagnant economic outlooks, market pressures and hesitancy amongst those who pay the bills to invest in services can constrict earning potential. While few of us in communications may have formal qualifications in economics, the fact that economies can be like balloons or bubbles that expand or contract, but where activity has consequences in different or opposing directions, is ever-present. 

If there simply is no more headroom to increase the overall wage bill, then that’s how it is. We’re all in it together, as they say. For employers, the persistent battle is to get the right people in the right places, with the right staff cost to revenue ratio to help support the achievement of target profit levels.

Transparency and confidence

Above all then, the main factors in managing expectations around wages tend to be transparency so that people understand fair pay and the path ahead, a full understanding of the factors that motivate people to do their jobs and to ensure that teams are outward and well as inward-looking, so that they see salaries in context of what’s happening in the world around them.

It’s easier said than done of course, and understanding human behaviour is as important if not more important than understanding commercial realities. Above all, one thing is clear: the more confident a sector communications is, and the more able it is to prove value, the greater the potential rewards and the prospects for us all.



Steve Earl Entrepreneur, former journalist and self-confessed cycloholic Steve Earl runs Zeno’s European operations. As co-author of Brand Anarchy and #BrandVandals, both published by Bloomsbury, there is little he doesn’t know about reputational risk and the opportunities for progressive PR.

Twitter: @mynameisearl