Thank you for your recent letter with your reference, PAYE/more/now. I have to agree with your polite comment that my earnings this year were “not quite a pittance, but…” However, working as a reward consultant and writer in the knowledge economy, digital universe, social media world, big data soup (sorry, I write clichés for a non-existent living) means that my work and earnings are different to the past.
In this new world, some of my work I get paid for (eventually). Some payment is contingent on business success (20 % of profits, subject to a threshold return, 3% of turnover etc). So I may see no earnings for a year, if at all, and some years I make a lot of money relating to work a couple of years ago.
Some of my work falls under what the innovation guru and hit music producer Peter Cook calls reciprocal relations. As you sow so you shall reap. (As a tax collector I thought you might like the biblical reference). What Peter was talking about was in the new social media world you do a favour for someone, just possibly and at a future date they will do something for you. So, a well-known IT entrepreneur called me to ask help in valuing some unquoted share options in a deal he was undertaking. That was a couple of days work; no charge, but he offered to help me out if I had IT issues. Or, a former investment banking colleague emailed me. There was over a million pounds in their pension pot; they had received a letter from the pension Trustee, but they could not make any sense of it. A couple of phone calls to contacts, a few days research and analysis and I was able to answer the questions. No charge, but if I ever need help understanding the bond yield curve I know the woman to go to. A professional institute sent me some reward survey data to look at. It was so interesting I spent a couple of weeks on some intensive analysis and writing some evidence based policy recommendations. No charge, but they have always been good to me.
I spend a lot of time undertaking writing and marketing. I guess there is not much call for creative writing and marketing in HMRC. I am really sorry if I am wrong; after all I do not want to upset an organisation that has more investigative muscle than the NSA. I get a lot of invitations to write and broadcast on HR and reward issues; but I have not, as yet, been paid for any. I live in hope. One critic said “Ian Davidson is the William Shakespeare of Reward.” (OK so that was my Mum). I have to spend time and effort marketing; I need more paying clients or even, hopefully, a permanent full-time job (by the way, any jobs in the Revenue, I am really good with numbers and finance). So you can see how I spend my time.
This is a new world of work and pay. Well, actually, it is not that new. People have being doing business like this for centuries. The concept of working 9 to 5 for a set salary is comparatively new. We are returning to a world where work relationships are very different and payment can be varied and highly contingent. Much senior reward is now subject to deferral, achievement of specific metrics and paid in equity or conditional bonds. This means my “pay” has a fifty per cent chance of having no value, forty per cent chance of being worth less than the grant value and a ten per cent chance of being worth millions.
A small but increasing proportion of people are working in this revised world. They may have multiple income streams or no income streams at all for periods of time. There is limited immediate payment for time spent on a task and far more for payment based on both current and future events; some of which are totally independent of the work task carried out for the future reward. It does get somewhat complicated, and that is before I undertake the Net Present Value simulations or start to consider all the new definitions of pay. We are heading to reward becoming dislocated from task and time. The payment for the corporate turnaround I am working on may be payable twenty years in the future when I retire; or, perhaps not at all if someone in five year time does not like how I achieved my impressive results.
I expect you know this stuff; but it does explain that although I have worked very hard this year I have earned “not quite a pittance, but…” However, as Del Trotter used to say: “This time next year we will be millionaires…”
Now, about the possibility of tax relief on a new computer?
Ian Davidson is an experienced reward manager, consultant, commentator and writer in the UK. He has over fifteen years senior level experience in the field; mostly in financial services covering investment banking and insurance. He specialises in executive pay, compensation and benefits, reward analytics & visualization together with reward risk and compliance. Ian has an MBA and is a Chartered Fellow of the Chartered Institute of Personnel and Development in the UK. He has a major interest in social media as a way of opening up communication and knowledge sharing.