Controlling costs and ensuring that packages are fair and transparent are two of employers’ main reward objectives.
Almost 80% of employers intend to take a holistic approach to managing their reward package in the future. In addition to salary and benefits, this will also take account of factors such as the working environment and flexibility. Just 29% of employees that responded to Watson Wyatt’s Total reward survey 2004, for example, believe their current package is flexible enough to meet their needs.
Employee dissatisfaction can result in higher levels of staff turnover. Some 61% of organisations said that they were looking to review their benefits package within three years.
Communication can have a marked impact on staff satisfaction. Those that understand exactly what they receive are more likely to appreciate their benefits package. Employee satisfaction levels increased by almost 25% when staff believed that their package was well communicated. Furthermore, satisfaction increases by 13% among staff who understand the value of their package compared with those that do not. Perhaps unsurprisingly, 78% of firms plan to review their communication strategies over the next three years.
Further changes will affect organisations’ pension schemes. Just over half of respondents said that they are planning to review their pension strategy in the next three years. And some employers have already begun. Some 41% have increased their contribution rates in the last 12 months, while just over a quarter (27%) have raised employee contributions.
• Contact Watson Wyatt’s Rachel Brown at [email protected]