Post Office (PO) retailers are to receive a combined £30m pay bump thanks to changes announced in the PO’s annual remuneration review.

Announced on 27 March, measures include a one-off payment equal to 15% of each branch’s March variable remuneration. The figure is attributed to a profit-share from the PO’s online sales, including its online parcels arm launched last year. The bump will be paid out this month and is worth nearly £5m for all affiliated stores.

Around £12m of the pay rise comes from an increase in Royal Mail tariffs on 2 April and an inflation linked 4% remuneration rate increases on handling pre-paid parcels and returns.

Elsewhere, there’s a 21% increase in remuneration on DVLA transactions and a 9.4% rise in postmasters operating outreach Post Office vans ‘to take into account the national living wage increase and changes in fuel prices.’ The 2,800 largest banking branches are also to receive ‘complementary’ high-grade note counters worth £3.5m.

The remuneration for Moneygram and Western Union ‘Cash to Account’ services will also increase to the same level as the Send product.

Operational excellence initiative

A large long-term funding model change is the launch of an ‘operational excellence incentive’ – paying branches for the previously unpaid back-office activities that are vital in running a post office. “Postmasters will have the opportunity to boost total variable remuneration by up to 5% each month”, a PO statement explained. The level of payout is based on meeting daily cash declarations, cash pouch remittances, cash holdings and monthly trading period accounting requirements.

Better Retailing understands the first operational excellence incentive will be paid out on 30 September based on the August trading period.

Chief executive Nick Read commented: “Postmasters are not immune to the current challenging economic environment, and we are acutely aware of the impact minimum wage increases have on their costs. Following a strong performance for our online business, and thanks to Postmasters’ help in building the brand and delivering fantastic customer service, we have again been able to share this success with Postmasters in the form of a one-off payment.”

The impact on branches

Based on 11,500 branches, the £30m bump is equivalent to an average remuneration increase of £2,600 per year, per store. However, with services offered differing by branch, the levels for many retailers will be significantly above or below the average.

One retailer, speaking on condition of anonymity laid out the impact of some of the measures on their PO branch:

• One off payout based on March trading: £90
• 5% Operational excellence initiative at 100% compliance: £30 per month from September start date
• DVLA remuneration rate increase: £0 (store does not provide DVLA services)

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