The v-c pay conundrum

Senior-level pay in the higher education sector, in particular vice-chancellors’ pay, is a hot topic and one that has sparked much debate over the past year. It is therefore unsurprising that steps have been put in place to increase transparency on this issue with the publication of the Committee of University Chairs’ new Senior Staff Remuneration Code – a positive first step. Also unsurprising is the debate that the code itself has generated.

The code provides universities with guidance on how to determine “fair and appropriate” pay and should help to increase public understanding of how these decisions are made. To comply with the new code, every university will be required to publish an annual report that sets out the salary of its v-c, along with the pay multiple showing how their remuneration compares with the median earnings of the institution’s whole workforce. If the multiple is significantly above average, it must explain why.

Using a multiple of the average earnings of an institution’s workforce is a method already commonly used in the corporate sector. While the resulting figure will vary greatly depending on the size of the university, employee make-up and location of the institution, it does provide a much-needed clear commonality and process for the sector to follow.

While it is great news that a measure and benchmark has been established, the code does not provide much guidance on what happens next. We need to see further clarity on who, if anyone, is responsible for monitoring and identifying consistent outliers – it is not yet clear whether or how these data will be used going forward.

The commentary to date also seems to have forgotten that this new code goes beyond v-c pay and is relevant to all senior staff. This emphasises the fact that pay concerns in organisations are not just focused on one individual – no matter what the media say. There needs to be an emphasis on increasing transparency on pay throughout organisations as a whole. You don’t tackle inequality in the workplace by only bringing higher salaries down, you also need to raise lower salaries and ensure that everyone is paid fairly.

There is, however, a valid argument that the role of the v-c has become more demanding over time as the UK sector becomes more competitive, complex and enhances its influence in the global higher education market. But the same can also be said of other key roles in universities operating in a competitive environment, such as digital and marketing leaders, student experience and spin-off innovation. The question, then, is how do institutions attract the best talent to increasingly difficult and demanding roles, while demonstrating value for money for both students and taxpayers?

This is where the sector needs to start looking beyond just remuneration when attracting new senior leadership and recognise that the purpose, culture and vision of an organisation plays an equally vital role. Having a sense of purpose is a way for an institution to build an identity and return something to society – an attractive quality in any workplace.

The culture of a workplace is important in creating a place where people want to contribute. This sense of positive identity should be important to an organisation of any size and it is something that should ring true with anyone working in higher education.

As the pace of change accelerates, many people worry about letting go of traditional values but we can’t forget that, fundamentally, people do care about the values of the organisations they choose to work for. An embedded purpose attracts both the conservative as well as the more outward-facing and altruistic, and institutions need to be doing all that they can to attract people who align with their culture and who will support their sustainable growth.

Jenny Brown, chief not-for-profit operating officer, Grant Thornton UK LLP.