The Renaissance and Refashioning of Skills-Based Pay for the 2020s: Learning From the UK

Skill-based pay (SBP) has had a long but chequered history. However, interest in it has intensified recently in the UK, largely as a result of labour shortages and increasing and often unsatisfied demands for skills, which prevailing market-driven approaches to compensation have failed to address. I...

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Bibliographic Details
Published inCompensation and benefits review Vol. 57; no. 3; pp. 193 - 213
Main Authors Brown, Duncan, Armstrong, Michael
Format Journal Article
LanguageEnglish
Published Los Angeles, CA SAGE Publications 01.06.2025
SAGE PUBLICATIONS, INC
Subjects
Compensation
Historical development
Labor shortages
Rewards
Skills
Talent management
Wage & salary administration
United Kingdom > UK
skills
talent management
reward strategy
pay management
compensation
skills-based pay
HR strategy
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ISSN0886-3687
1552-3837
DOI10.1177/08863687241257978

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Summary:Skill-based pay (SBP) has had a long but chequered history. However, interest in it has intensified recently in the UK, largely as a result of labour shortages and increasing and often unsatisfied demands for skills, which prevailing market-driven approaches to compensation have failed to address. It has become evident that SBP can provide a useful means of supporting organisations to attract, retain, develop and engage the increasing numbers and range of skilled people they need to grow and succeed. In this article we describe the current context within which SBP is being developed; review the historical development of the approach and then illustrate the increasingly varied range of methods now being taken to how SBP is being applied in the UK; and draw some tentative conclusions from our analysis for SBP’s practical application, along with implications for future research.
ISSN:0886-3687
1552-3837
DOI:10.1177/08863687241257978