Duncan Brown: The soul of benefits management

Is HR losing sight of its true purpose?

Nelson Mandela said you can judge the soul of a society by how it treats its children. Halifax’s annual Pocket money survey last month left my teenage girls disappointed. Rather than upping the financial ante on dad, it revealed an annual 8% decline to £5.98 per week, a 6% increase in those receiving nothing, as well as a somewhat scary, if personally helpful, 37p premium for boys over girls. What does this say about our society?

Mandela repeated the sentiment expressed by Mahatma Gandhi, who said: “A nation’s greatness is measured by how it treats its weakest members.” Alongside increasing levels of child poverty and youth unemployment, freezes and cuts in jobs, pay and benefits in the five years since Lehman Brothers’ collapse have generally hit the weakest, worst-paid workers hardest.

Independent research and policy organisation The Resolution Foundation last month reported a decline in real wages for all but the highest-paid, with 16 to 29-year-old unskilled males suffering the largest decline of 9% since 2003. New Economy, which aims to create economic growth and prosperity for Manchester, found the poorest 10% of workers in the city live on less than £6,500 a year, with a real wage decline of almost 20% since the recession began. Pay and benefits are getting worse at the bottom and better at the top. The national minimum wage of £6.08 compares with the £1.01 billion made by Barclays’ top 238 staff last year.

HR and benefits professionals have been aligned with their business and leaders during the recession, delivering cost savings through benefit cut-backs, pay freezes and process efficiencies. But does the profession have a soul, and does it care about the impact on staff?

What will happen longer-term, when the labour market eventually picks up and we are left with many staff unable to afford to retire? Will we ultimately see the end of corporate benefits and our role?

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The HR profession started out as the Welfare Workers Association, enhancing employment standards. Enlightened employers such as Quaker George Cadbury realised staff welfare and company profits are ‘different sides of the same coin’ and provided impressive childcare, pensions, medical and sports facilities at the firm’s Bourneville factory.

So why did we enter reward and benefits management? Was it just to cut costs, or to provide a secure, attractive basis for employee engagement and high performance?