In the UK, a unique dimension has been introduced to the issue of incentives for working over the new year holiday period in 1999/2000 by the millennium festivities and the feared millennium computer "bug". More people will be required to work at a time when more people than usual may be hoping to celebrate. An examination of the patterns of incentives offered by employers indicates that early expectations of a pay bonanza for staff appear to have been unfounded, except for those in key sectors such as information technology.
In 1999, 31 December will be a one-off additional public holiday in the UK to mark the new millennium. This has contributed an additional upward pressure for greater pay and time off in lieu for workers obliged to work over the new year holiday period. The main jobs affected by millennium working are in information technology (IT), leisure, the utilities and emergency services. According to a recent survey ("Millennium payments", IDS Studies 675, September 1999), levels of compensation differ according to: whether the requirement to work over the new year period applies each year (as is the case for many public sector workers and shiftworkers); whether a standby arrangement applies (a much larger group in 1999 than usual); or whether staff have specifically been contracted for the 1999/2000 new year period (especially IT specialists and workers in the leisure sectors).
In the public sector, many workers such as nurses and police officers normally work over the holiday period. In most of these cases only the usual bank holiday premia will apply for new year working, although a few hospital trusts have found funds for additional bonuses. In the private sector, the most common practice for employees on site is the provision of an enhanced hourly rate plus a bonus, although there is a great deal of variety in the levels of payments offered. The Abbey National bank is paying six times the standard hourly rate over the period from midday on 31 December 1999 to midday on 1 January 2000, five times the standard rate for the next 12 hours and three times the standard rate for the following two days. Other firms are commonly paying two to three times the standard hourly rate plus a cash bonus, although a few organisations are also providing non-cash incentives in recognition of the potential disruption to employees' families. For example, Three Valleys Water is offering restaurant and theatre tickets, Reuters and Severn Trent Water are offering gift vouchers, and British Airways is providing free flights.
A large number of people will also be on standby over the holiday period, particularly IT specialists in the event of computer failures as a result of the "millennium bug", when many computers may fail to recognise the year 2000. Some companies are paying a lump sum for each 12 hours on standby (for example, GBP 100 at the Alliance & Leicester bank, or GBP 500 for the four days of the millennium weekend at Yorkshire Water) whereas others offer an enhanced hourly rate (such as the Bank of Scotland, on a scale peaking at GBP 45 per hour). In the event of standby being utilised, special call-out payments also usually apply, normally a combination of enhanced overtime pay, time off in lieu and a lump-sum bonus.
High pay-outs uncommon
A further recent survey ("Millennium pay round-up", IRS Pay and Benefits Bulletin 477, August 1999) found the most common arrangement for the holiday period to be normal double-time hourly rates with a median additional millennium bonus payment of around GBP 250. Around one in four organisations surveyed also offer some time off in lieu. Less than a quarter of organisations would be paying triple time or more. The biggest payments are for IT jobs, particularly in finance and the utilities. Most big companies are making their own in-house arrangements for cover, so freelance rates have not increased as much as expected. In fact, a recent survey by the IT recruitment consultancy Robert Half International reported that a quarter of organisations have made no pay increase at all to IT contract workers and a further 18% are actually paying them less than a year ago ("Millennium bug wage surge fails to materialise", Financial Times, 9/10 October 1999).
Yet it is public sector workers and those in the hospitality industries, the other main sectors likely to be affected by increased demand over the holiday period, who are likely to get the biggest "raw deal", according to Hay Management Consultants. This organisation's survey of over 500 organisations ("Millennium weekend compensation and policy survey", 1999) found that many public sector bodies will not only be treating the millennium as just a normal bank holiday, but will also be much more likely than private sector employers to cancel staff leave. The costs of needing extra staff numbers has helped to limit the funds available for additional bonuses and encouraged a diversity of local settlements. Employers in local government, for example, rejected a national claim submitted by the unions on behalf of local authority workers. Likewise, in April 1999 the NHS Executive announced that no national system would be introduced in response to a staff-side claim for an additional GBP 500 flat-rate payment for all National Health Service staff. This has led to a variety of practice in hospitals, with an emerging norm of usual bank holiday premia plus an additional bonus in just under half of health service trusts of anything between GBP 50 and GBP 200 for staff working on new year's eve. No additional payments are to be made in the fire brigade or police forces.
In hospitality, few formal agreements covering millennium working have been reached. This is despite the potentially large demand for services over the new year, with pubs for example allowed to open for the first time for a continual 36 hours from 11.00 on December 31 1999 until 23.00 on 1 January 2000. In fact, a survey of 650 pubs by The Publican newspaper found that one in five will not be paying any extra for new year's eve and a further 18% would not even be opening. Likewise, a survey of 300 hotels, restaurants and pubs by Caterer and Hotelkeeper found that only three in five would be offering any increased wages for working new year's eve, although this was up from just 26% in 1998. However, Allied Domecq, one of Britain's largest pub chains, has agreed to pay staff triple time plus 5% of the evening's takings, while the Committee of Registered Club Associations has concluded an agreement with its trade unions to pay triple time plus a day off in lieu for any of its 50,000 bar and catering staff working the new year's eve shift.
Commentary
The biggest group of beneficiaries from special millennium payments will be computer technical staff, because of fears of computer failure, especially in the finance, utilities and communications sectors. Some of these benefits have been realised far in advance of the new year as employers have looked to recruit and retain technical staff in a tightening labour market. Early in 1999, for example, Sunderland Council paid salary top-ups of GBP 8,000 to its 40-strong "Year 2000 team", and Leeds City Council paid a salary bonus of GBP 6,000 to its entire IT department. Other significant payers have been the financial institutions, with HSBC bank (the first to finalise a millennium package) offering employees eight times their normal salary to work over the millennium weekend.
In other sectors affected by the millennium, settlements have been lower. In hospitality, for example, a significant proportion of staff will receive no extra benefits. In part, this is related to lower levels of unionisation and looser labour markets, but it might also correspond to research findings from the Institute of Personnel and Development ("New year's eve: just another quiet night in?", May 1999) which suggest that demand for hospitality services will in fact be no higher than the previous year. Many pubs, clubs and restaurants are closing rather than risk opening to average demand but with higher staff costs.
In the public sector too, special payments have been rare. Public services are labour intensive, and extra costs arising from millennium payments could have significant implications for other parts of the budget. Many of these services are also routinely scheduled over new year and other public holidays, and employers have seen little reason to pay additional supplements other than where they fear that they might have difficulty securing adequate staff cover, such as in parts of the NHS. As a result, many of those who will be working unusually hard over the millennium period will receive little by way of additional recompense. (J Arrowsmith, IRRU)