The evolution of remuneration and the impact of COVID-19
COVID-19 has had a wide-reaching impact, touching almost every area of the business, not to mention the labour market. With many industries such as Hospitality taking huge hits, the introduction of the furlough scheme and unemployment rising to 4.1 per cent* there has been an unforeseen, 180 shift in the labour market, which is now predominantly job led. This shift is a key consideration for businesses to understand, however, is not an excuse to rest on our laurels when it comes to our benefits offerings.
In the last decade, the workforce has evolved becoming more diverse than ever and trends in remuneration packages have followed suit to reflect and support this. Traditionally, the monetary reward was a sole and primary focus. However, a more holistic approach has evolved with organisations prioritising benefits that add value to employees in all aspects of their life (e.g. Mortgage guidance, childcare vouchers and ELS schemes).
COVID-19 has brought the importance of these benefits, particularly non-financial, to the forefront and is a stark reminder than in an unpredictable world, flexibility, adaptability, and reactivity are key. Prior to the pandemic, flexible working opportunities (e.g. working from home/ remotely) were high on the list of many employees desires.
However, having been made mandatory for many over the last few months, it could be a consideration that their needs and wants may have shifted. 69 per cent of adults in the UK have reported feeling worried about the effect of COVID† on their life and 56 per cent reported feeling stressed or anxious. Adapting your offering to include extra wellbeing support services- access to advice lines or guidance on coping with stress or anxiety through an EAP portal would not only support your employees in the current climate but increase engagement and retention and lower stress-related absenteeism.
Determining what to offer
There are several things to consider when determining what to offer. When trying to work out your remuneration packages, identify what is driving this. Why are you implementing these benefits and what are you looking to achieve?
You may be focusing on organisational growth and so attracting talent would be a high priority. Alternatively, if retention is an issue, you may be focused on engaging those in which you have already invested.
Having identified why the next stage is identifying the what- what are you going to offer your employees. There are three main points to consider here – it is important to remember that what you offer should be in alignment with, and reflective of your company values which overall, sets the tone for your organisational culture.
For example, if you have strong environmental-related values, offering a car scheme which included petrol and diesel cars sends a confused and disjointed message which could be at the detriment to your employer branding. Secondly, it is essential to understand your workforce- there is no point investing in benefits packages that nobody wants; understand what they like about your current offering, what else they would like to see included.
This could be done through a companywide survey or votes and polls on the company intranet. Finally, once you understand what your people want, you should look to your external environment. Understanding what your competitors are offering is a good way benchmark your own package. However, this should largely be for awareness, let your organisational objectives, values and, most importantly, your people guide you.
As an organisation, there are a few things that you are legally required to provide to your employees in return for their service and work, including annual leave and pension provision. However, once you’ve covered ‘the basics’ there are a plethora of options to choose from. The workforce is made up of individuals at different stages of their lives and careers, with a range of different wants and needs. Your benefits offerings should reflect this – from Millennials looking for high street discounts and career development schemes, young professionals seeking flexible childcare options and advice on mortgage rates to those close to retirement who may be more appreciative of private health care options.
Keeping on top of the game
Once you have implemented your remuneration and benefits package, it doesn’t stop there, continual review and improvement are key, especially in such a fast-paced competitive market.
Pulse surveys are being increasingly utilised, particularly during the current circumstance, to understand how employees are feeling. They are also a great way to measure the effectiveness of your package but also an understanding of any shifts in your people’s needs and wants.
Keeping up to date with what your external environment is also crucial, understanding not only what your competitors are offering, but also what are the latest trends? For example, progressive, forward-thinking companies have shown us that remuneration and benefits packages are moving away from ‘things’ and focusing more people- i.e. their training and development programmes and overall working environment.
There are several considerations for employers looking to implement remuneration packages- simply implementing a good package or benefit scheme isn’t enough. Employees must be aware of what is available to them (e.g. through job descriptions, internal communications or online portals) and that these benefits are easily accessible.
Furthermore, it is crucial that employers understand that peoples’ needs and wants are constantly evolving and that remuneration packages and benefits should reflect this.