Hachette introduces new pay structure amid calls for greater trade transparency

Hachette UK has announced a raft of new measures this week to bring more transparency to how pay is calculated, awarded and communicated at different levels of the company. The firm’s move comes as a number of other publishers review their pay policies, although few contacted by The Bookseller for this article would comment publicly on their plans.

The issue was thrown into the spotlight yet again in the summer, with questions over low pay levels and poor pay transparency. A list of how much people were paid at various levels of the trade was widely circulated online, with some staffers commenting on their frustration at failed attempts to secure pay rises. More recently, a survey of the trade on the impact of coronavirus found a number of employees voicing frustration about pay freezes at their place of work.

More positive news arrived this week however, as Hachette UK announced it was raising its entry-level salaries to a minimum of £24,000, sharing salary ranges at higher levels of seniority and, for the first time, introducing transparency on its bonus structure.

The move to increase its minimum London salary from £23,000 has been created in line with the company’s commitment to improve pay for more junior roles in its business, and takes effect from 1st January 2021. This new entry-level salary will apply to all roles in Hachette UK’s publishing divisions and central departments, but excludes some roles within the facilities support team.

This particular change brings its starting wage in line with Penguin Random House (PRH) which, at the start of this year, also adapted its approach to pay and salary progression for those in the early stages of their career. At PRH, all new London-based joiners to entry-level positions receive a minimum annual salary of £24,000, with an automatic increase of £1,000 in their first two years of service, up to £26,000. At HarperCollins, meanwhile, the starting wage is £24,250 for permanent roles.

Recruit—and retain
Melanie Tansey (pictured right), group HR director at Hachette UK, said: “The success of our business depends on our ability to attract and retain the best people to deliver on our mission of unlocking new worlds for consumers. To continue building our open and progressive culture, we need to be transparent and fair about how pay decisions are made, and show how pay might progress as people develop their careers at Hachette UK.

“Since 2018, we have been introducing different ways to make pay more transparent and, alongside our gender and ethnicity pay gaps, these latest measures are vital to holding ourselves to account, while motivating our employees to drive our business forward.”

As part of its changes, Hachette UK’s pay ranges will be transparent on roles with a median salary of up to £80,000. According to Hachette UK, the company has been internally publishing its salary ranges for roles with a median salary of up to £60,000 since 2018, but this will now be extended to include higher levels of seniority.

In all cases where it has published salary ranges, there are at least 10 people in every job to allow confidentiality within a range. The company said the pay band ranges had to be capped because beyond the £80,000 mark there would be too few incumbents in each role for pay to remain confidential. Externally, Hachette UK boasts that it shows pay ranges for the majority of jobs it advertises.

To aid transparency around bonuses, the company is also adding the median stretch bonus target range to the pay ranges it publishes internally, so employees can see which roles bonuses apply to, and the typical target percentage. Some management roles and senior roles at Hachette UK attract an annual stretch bonus target above the 5% target applicable to everyone else, and these increase with the level of responsibility and expectations of the role.

In recognition of the contribution Hachette UK’s employee networks make to its business, and in particular to its diversity and inclusion programme Changing the Story, the company is now offering an additional 5% stretch bonus target to all of its network co-chairs from 1st January 2021, effective for the duration of someone’s leadership of a network. An “employee toolkit” to help people understand how budgets are set, its pay ranges, how pay increases happen and how bonus schemes work is also being introduced.

Although the government removed the requirement for companies to publish their gender pay gaps by April 2020 owing to the pandemic, Hachette UK has said it will publish its 2020 gender pay gap as planned in January 2021.

Responding to the announcement this week, Emma Petfield and Ellen Harber, co-chairs of Hachette UK’s Gender Balance Network, said: “As a network, we firmly believe that greater transparency across the business is vital to closing the gender pay gap, empowering Hachette UK employees to understand and affirm their contribution to the business, as well as attracting the widest pool of new talent. We welcome this commitment to transparency as part of the larger ongoing effort within publishing to reduce barriers to entry and progression.”

Opening up?
Hachette’s changes reflect a slow-moving effort in the industry to be more open about pay levels. PRH is nearing completion of its own project to make pay transparent across the organisation, with the results set to be communicated internally soon. The project aims to open up the firm’s pay principles, how decisions on salary are made, and how pay connects to learning and development opportunities, career development and progression.

The publisher already publishes entry-level salaries on job advertisements and, once its pay levels have been shared internally, will start to publish others on job adverts too. PRH also says it is “transparent” on its own bonus structures.

At HarperCollins, which does not have pay bands, director of people John Athanasiou said the company’s focus in recent years had been on increasing salaries faster in the lower pay quartiles. He said: “Our minimum salary in London is £24,250 for all permanent entry-level roles, and this is stated on our adverts. Our internships are for a fixed period of six months, for which we pay the London Living Wage or the UK Living Wage, while our learning placement days have gone virtual throughout Covid. We use market-driven data through salary surveys to help determine compensation, while checking and conducting an equal pay audit.”

On the academic side, Oxford University Press publishes its salary bands internally by job level and says it increased more than 200 employees’ fixed pay last year to ensure they met the minimum in their band. It has also rolled out its “Fair Pay Principles”, which promise employees a living wage, and launched a Global Job Classification framework that aims to provide transparency on pay, job equity and skills required to progress.

Natasha Wilson, OUP’s group reward director, said: “Paying employees fairly, inclusively and equitably relative to their role, skills and performance is central to OUP’s evolving reward philosophy. We are proud that all of our roles worldwide are now aligned with a clear and transparent job framework, and that our people receive compensation that adheres to our Fair Pay Principles.”

At Pearson, chief human resources officer Anna Vikström Persson said:  “We are committed to being transparent to ensure we support and reward our people appropriately. We are excited to be rolling out a modern, dynamic total reward platform from 2021 which will enable employees to see each element of their package and the real time value of what they are offered at Pearson. Reward is only one part of our Employee Value Proposition; we support our people's well-being and development so everyone can unleash their talent whilst helping millions of people make progress in their lives through learning.”

The American Dream
The changes at some of the big UK firms come as publishers in the US appear to be leading the way on pay reform. Last month, Beacon Press boosted its entry-level annual salary by around $9,000 to $44,600 (£33,490)—far more than a fledgling UK publishing employee would expect. This week, Hachette in the US also announced starting salaries would be raised  to $45,000 at more expensive locations, with salaries elsewhere starting at $41,000. 

Macmillan also created headlines in September when its new c.e.o. Don Weisberg raised entry-level salaries of its US publishing staff to $42,000 (£31,500). Weisberg, who said the change would expand its applicant pool to include those who found the starting wage too low, also said current staff earning below that amount would see their salaries raised. However, the firm was quick to point out the changes did not apply to employees across the Atlantic.

By contrast, most UK publishers have historically been coy about how much they pay their staff. However, a rough indication on the lack of movement in UK publishing can be seen from the accounts of firms who publicly file their results. For example, at one mid-size publisher, the 2019–2020 mean average salary was £42,200, compared to £41,700 at the same firm in the 2009 financial year. Adjusting for inflation, the latter wage is worth £56,300 today, meaning employees are hugely worse off now than they were then.

The trend is echoed elsewhere. At a small independent press, average pay was £43,700 in 2019–20, compared to £39,700 in 2009–10. Adjusted according to inflation, the pay at 2009–10 levels would amount to £51,200 today.