The Financial Conduct Authority (FCA) plans to give its workers a guaranteed minimum pay increase of 4.5% from April, with an average pay raise of 6.5%.
In a letter to trade union Unite the regulator said it expects to implement an average base salary increase from April 2023 of 6.5% across the FCA and the Payment Systems Regulator (PSR).
There will be a guaranteed 4.5% minimum salary increase for employees up to senior manager level with an end of year performance rating of three or above whose new salary is below £125,000.
The below inflation pay deal builds on separate cost of living payments the regulator made to most employees over this past financial year, amounting to £1,250 per employee, the FCA said. UK inflation is currently running at around 10.5%.
Employees at the FCA have been disgruntled and locked in a dispute through the trade union since the regulator launched its overhauled employment offer in March 2022.
In the letter, FCA chief people officer Siobhán Sheridan said the latest pay offer followed an “extensive” period of consultation, with 4,500 responses received through the regulator’s feedback tool, 2,200 emails sent to its HR team, 700 comments raised in meetings and more than 580 questions answered on its intranet site.
This was in addition to 77 executive committee-led colleague sessions and regular engagement with staff consultative committee representatives.
Sheridan said the executive committee and people committee of the FCA board looked at a wide range of information, adding decisions had been “informed by benchmarking data, what we’re seeing happening inside our organisation, our own experience of recruitment, the wider economic context, and the level of fee income from firms we have available to invest in our people”.
Sheridan added that the regulator had continued to listen to the views of its employees and said she remained confident the pay offer “continues to meet our clear commitment to our staff to provide one of the best overall employment packages of any public authority, regulator, or enforcement agency in the UK”.
Sustained drop in number of leavers
Unite wrote to the regulator earlier this month warning half of FCA staff were seeking to leave the organisation.
In response, Sheridan revealed staff turnover had fallen “sharply” during the period of the pandemic and then had risen afterwards.
Sheridan added the regulator’s voluntary turnover rate was 16% on a 12-month rolling basis as at 31 January 2023.
However she added in the last three months there had been a “sustained” drop in the number of leavers, with leaver data suggesting this level looked set to continue over the next three months.
“If we project forward and consider this on an annualised basis this would suggest we are currently seeing attrition at a rate of around 10-12% which is broadly in line with what we saw at the FCA prior to the pandemic,” Sheridan continued.
“We continue to retain knowledge and experience within the organisation. At the end of 2021 there were approximately 1,205 colleagues with eight or more years of service at the FCA and at the end of December 2022 the comparable figure was 1,339.
“Headcount growth has continued into 2023 with headcount at the end of January reaching 4,352. We expect our headcount will continue to grow with at least a further 150 new joiners expected before the end of this financial year in March 2023.”
Unite’s letter also warned of rising staff anger and discontent at the regulator after the union found 87% of members who responded to it were dissatisfied with the FCA’s employee offer of 2022.
The offer led to employees twice backing industrial action over the new pay and conditions last year. In November Rathi committing to speaking to staff to turn their feedback into action.