Fair pay guarantee.
We want to align pay and reward with the success of the business. That is why we have a 'fair pay' guarantee.
Like most agencies, we manage the cost of pay and non-financial benefits for team members using a benchmark ratio. This means that our total staffing costs – pay, National Insurance, paid holidays and pension costs – should be no more than around 55% of our agency income.
At Deeson, we also have a number of other benefits for team members that we budget for – tech budget, wellness budget, recognition scheme, paid sabbaticals etc.
The budget for these additional benefits means we currently budget to spend a total of 57.1% of agency income on all staff costs each year.
We manage our costs carefully to make sure that these ratios are met, as they are an important part of achieving a sustainable profitable and stable agency business.
But it’s never possible to ensure that the ratios are achieved exactly. For example, if we deliver a strong business performance without additional staffing costs (for example new hires), then our income will go up but our staffing costs won’t. This would mean our staffing cost to income ratio would be less than 57.1%.
In such situations we feel it’s fair that team members overall receive the benefit of this improved business performance.
For example, regarding our target ratio of 57.1% for 2017/18 – if at the end of the company’s financial year, the total staffing costs only equate to 53% of our agency revenue, the remaining 4.1% will be distributed equally to all eligible staff as a bonus, once the agency’s end of year accounts have been finalised.
The 'fair pay' guarantee works like this:
- The total 'fair pay' guarantee payment is calculated based on the end of year accounts that are prepared from October to December each year. The payment will be confirmed in January each year and paid in February.
- The total comprises the difference between the actual staffing costs for the financial year and the target amount (equivalent to 57.1% of digital agency revenue this year).
- The target percentage will be set every September for the following financial year, as part of the budget setting process.
- All digital agency team members who worked for the company during the financial year and are still working for the company on 1st January of the following year, are eligible for an equal share of the total, paid with their January or February salary payment.
- Any team member joining part way through the financial year will be entitled to a pro-rata payment.
- Any team member working their notice period on the payment date (1st January or 1st February) will not be eligible for the payment.
- Any team member who has had or is part of active formal disciplinary or performance management procedures during the financial year or on the payment date, may lose their entitlement to the payment. This is dependent on the individual circumstances and is at the Managing Director's discretion.
- If a team member’s salary is frozen under the transitional arrangements set out below, their entitlement to the 'fair pay' guarantee will be reduced by the differential between their actual salary and their impact outcome rating salary. This may mean they aren’t entitled to any 'fair pay' guarantee payment at all.
- If the company’s total staffing costs exceed the target percentage (57.1% for 2017/18) of agency income, then there won’t be a 'fair pay' guarantee payment.
- This scheme is a non-contractual bonus and can be reviewed, altered or withdrawn at any time. It will be reviewed annually, with the first review planned to take place in January/February 2019.