Reward professionals have been busy responding to an increasingly tight labour market in the latter half of 2021. While skill and labour shortages have been felt across the board, they have been most acute in hospitality, haulage, health and social care, with bonuses and pay increases being used to counter the problem.
The situation looks set to continue next year: our latest Labour Market Outlook published on 15 November found that one in four employers (27%) expected the number of difficult-to-fill vacancies to increase in the next six months. It’s likely employers will continue to refine the financial and non-financial rewards they offer in order to stand out in the labour market, and some may even launch headline-grabbing initiatives.
Flexible working continues to be another big talking point this year, and not just among reward professionals. While we have seen an increase in home and hybrid working, use of other types of flexible working such as job-sharing and compressed hours has gone into reverse. Increasing the range of flexible working arrangements on offer, and making it a day-one right for employees, should, we believe, be another focus point for reward and HR professionals in 2022.
2021 also saw gender pay gap reporting being reinstated and ethnicity pay reporting gaining further traction. The direction of travel is for greater scrutiny of pay as well as more transparency, and it’s likely that before long, ethnicity pay reporting will become mandatory for large employers, which we very much welcome. To ensure they’ are prepared, we would suggest employers voluntarily disclose now or at least put plans in place to do so in 2022.
Another issue that we expect to come to the fore in the coming months is financial wellbeing, given that the cost of living continues to rise. To start with, employers should be paying a fair and liveable wage, but they should also be looking at what benefits they can offer to reduce the risk of staff falling into financial difficulties, and whether paying people more frequently might help. We would encourage all employers to have a financial wellbeing policy in place that is aligned with their wider wellbeing strategy.
Charles Cotton is a senior reward and performance adviser at the Chartered Institute of Personnel and Development (CIPD)