A USEFUL GUIDE TO NOT BEING MISLED
Statistics provided by the Office for National Statistics’ survey, the Annual Survey of Hours and Earnings, have long been a source of data to which employment consultants have referred to forecast earnings and upon which lawyers and the courts have relied.
While the application of ASHE has its uses, in our view it is entirely wrong and misleading to postulate a career but for an accident, or residual earnings based on these values. The questionnaire sent to employers by ONS is not designed to extract information from which to quantify at what level a worker may sit in terms of career hierarchy, therefore it is not possible to forecast a career from this data. As may be seen from the ASHE questionnaire extract below the only reference to the job is at 2b and 2c.
If, for example, the answer to 2b is ‘Chartered Accountant’ it is impossible to determine whether the individual is newly qualified or how many years post qualification or at what level e.g. Junior or Partner. ONS is unable to decipher where a worker sits in the grand scheme of things and therefore it is not possible to match earnings data to a particular rank.
The use of mean (average) values and percentiles/quartiles is equally inappropriate as the median is the preferred methodology recommended by the ONS.
Some experts refer to Table 14.7a, annual earnings, and it is important to bear in mind that if these tables are used to suggest earnings upon commencement of work, especially in terms of residual earnings, this is not possible. A footnote to Table 14.7a states the data refers only to ‘Employees on adult rates who have been in the same job for more than a year’.
For the same reasons, it is not possible to forecast in terms of percentiles/quartiles and should your employment expert suggest, for example, that Mr X will commence at the 25th percentile and over a period of time increase his salary to the mean or median, or a higher percentile, you are being misinformed.
ASHE data should be used only for the purposes of comparison.
For a full explanation please download Trevor’s article which appeared in the April 2010 edition of APIL’s ‘Focus’ magazine here.