The annual CIPD rewards survey report reveal that employers are changing their rewards and benefits strategies to battle the recession. While cutting costs is at the forefront for many employers, the report also highlights that employers are struggling to retain senior employees who are considering retiring.
Over 40% of employers using variable pay are looking to entirely revamp short term incentives.
More worrying is the revelation that 46% of employers are not aware of their total remuneration spend, including employee benefits, base pay, variable pay and employer national insurance contributions.
The public sector is the most affected by this trend, with 56% not calculating the value of what they offer to employees. Many companies will be looking to not only cut costs, but also improve on measurement and reporting.
The CIPD has warned that pay incentives should be altered carefully.
“Many business strategies are being put into the waste-paper basket and reward strategies have gone with them,” said Charles Cotton, CIPD adviser, reward.
“Organisations must ensure they don’t introduce knee-jerk reactions on reward issues when, a year down the line, it could cost them in legal claims or lost savings”.
Legal experts also warned that tearing up established pay incentives could make companies vulnerable to heightened risks of discrimination, making it crucial to make such decisions collectively.