When to Use Alternate Pay Rates for EmployeesShould you adjust employee pay for weekends, holidays and more?

The key to successfully managing your business is knowing that no two employees are the same.

Whether employees operate in multiple locations or you employ seasonal workers, juggling the different needs of your staff can be a challenge.

Having different rates of pay is a useful tool, supporting you to meet the needs of your employees and boost the productivity of your business. Here’s how to use them to your advantage.

What are alternate pay rates?

Many small-to-medium-sized businesses employ people in various roles and at different times of the week or year.

A system of alternate pay rates is one in which employees are paid differently based on the type or hours of work they do.

Wondering where to start? Fear not.

Where you implement this system is largely up to you as a business owner, but here are some of the most common circumstances in which you may opt to use alternate pay rates.

Employees in different locations

If your business operates in multiple locations, you may wish to pay employees differently based on where in the country they are working from.

Living costs, including transport, mortgage, and food costs, vary from place to place. Employees working in expensive areas—notably London but other cities too—will need higher pay.

This can be implemented through your alternate pay rates system.

For example, median rent in London stood at £1,450 per month in the 12 months to March 2022—a stark comparison to the England average of £795 per month.

Support your staff in successfully managing their living costs by paying them respective to their location.

You can set the pay rate based on cost of living statistics. Factoring in rent, you would set the rate to around 2x.

Employees in management roles

With great power comes great responsibility—and in most cases great pay.

The most effective way to boost performance in your workplace is by offering employees the opportunity to move from junior to management positions.

To create incentives for progression, management roles should be included in the alternate pay rates system. Those who manage others or larger projects should see larger pay within the system to reflect their increased responsibility.

Employees in training

Staff undergoing training may be paid a lower rate than their counterparts. Rather than taking on their own tasks, trainees tend to spend most of their day shadowing others, which can be reflected in lower pay rates.

During an employee’s training process or probation period, you can set the pay rate to a specific amount with the promise of an increase once training is complete.

Seasonal employees

Seasonal workers may be a vital part of your business’ operations during certain times of the year. Notable examples of when you might hire seasonal help include Christmas or periods when tourism is higher.

With UK companies facing difficulties in finding seasonal workers, paying them at a higher rate bolsters your hiring process.

You could consider a different pay rate for these employees, offering them higher pay to secure their services during busier periods.

Evening and weekend shifts

Work patterns that go beyond the standard 9am–5pm weekday hours may require additional financial incentives. Both new hires and existing staff will find working evenings and weekends to be less compatible with their personal lives.

To ensure harmony within your workforce, consider adopting a special pay rate for employees asked to work outside of normal hours. This will incentivise employees to opt for these often hard-to-fill shifts.

Bank holiday shifts

Just like evening and weekend shifts, bank holiday shifts pose a recruitment risk that may affect the ability of the business to operate effectively and safely.

Any business owner knows that convincing staff to swap their Christmas stockings for a Christmas shift is a challenge.

Most of your employees would opt not to work on such days as Christmas Day and New Year’s Eve given the choice, and so additional pay is an important tool to incentivise those more willing to agree to bank holiday hours.

Bank holiday work should be offered at an even higher pay rate than evening and weekend shifts, given what your employees would miss out on by working.

Ready to start using alternate rates in your business?

No matter what business you own, you’ll need to adopt a system of varied pay rates for your employees. There are many situations when standard pay isn’t appropriate and alternative arrangements need to be made.

A company offering alternate pay rates presents itself as intouch with varied employee situations. Such businesses will be rewarded with hard work, commitment and motivation from staff.

Ready to give them a go? Find out how you can create alternate pay rates for special circumstances with Findmyshift.

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