Need to know:
- Employers should not overlook the importance of a reward and benefits strategy in the midst of making major workforce changes, such as redundancies.
- Employers should use the changing face of the workplace to remove any expensive or legacy benefits that are no longer relevant.
- Organisations should avoid tying themselves in to long-term reward packages with an unknown future ahead.
With the Covid-19 (Coronavirus) pandemic still very much shaping our future, there are a lot of question marks over benefits and reward strategies. The key issues range from financial limitations to employees’ physical locations. The question is, how can an organisation create an effective strategy when we are not sure what 2021 will throw at us?
Organisations need to take a step back and fully review their entire benefits provision in order to move forward into 2021, says Rob Boland, chief operating officer (COO) at Reward Gateway. If they do not, they could be left with an outdated reward strategy that is no longer relevant to employees. “The benefit provision now needs to meet the requirements of a remote workforce; season ticket loans or travel loans, those were fundamental benefits, but if someone's not travelling to the office on a regular basis that's no longer a benefit at all, for example,” he explains.
The new face of employees
One of the biggest workforce trends that has come out of 2020 is the acceptance of remote working. This forced change to the working environment for many organisations has revealed that it does not matter where an employee is based, they will still get the job done. Furthermore, a study of 2,000 UK employees, conducted by Owl Labs in August 2020, revealed that 41% of respondents would resign if they were forced to return to the office.
Jack Curzon, consulting director at Mercer Marsh Benefits, says: "We are never going to go back to where we were working before. Before, there would be an expectation of salary in different locations, an expectation of being in the office and commuting times, and now it’s now been completely blown wide open. A firm in London could hire people from Scotland. Leeds, Ireland, or even theoretically over in Europe, because location isn’t an issue any more."
However, if employers are considering opening up their recruitment globally to attract and retain the best talent, they will have to pay more attention to creating a global strategy that takes into account employees’ individual locations.
This will be one of the key issues that organisations will face in 2021, says Boland. “Businesses are going to have to take a step back and say, 'existing benefit strategies aren’t going to work'. Employers have to think very differently about their reward and benefits strategy because it might not be a single geography [they're] working against anymore, and it's going to be one of the biggest challenges in the future."
Creating a strategy amidst redundancies
Not every organisation is looking forward and planning a recruitment drive. With the fear of redundancies looming, employers might be looking at how to retain and motivate the employees they already have. This will be a big challenge in 2021 for a large number of employers, says Andy Philpott, sales and marketing director at Edenred. “Organisations need to be working hard to make sure those employees that are still employed aren’t looking over their shoulder because of recent redundancies," he explains. "If [employers are] making some of their co-workers redundant that's a really dangerous period, which is why communication is the main thing, but [they] really have to focus more effectively on [their] overall strategy."
Most benefits are cost-effective and showing employees that are still within the business that they are appreciated will go a long way in engaging and increasing productivity levels during this unsettling time, adds Philpott.
Streamlining benefits
With budgets tightening, it could be the perfect opportunity to turn a negative into a positive and remove any benefits that are no longer relevant. Organisations that are facing cost pressures can take this opportunity to fix legacy benefit issues, says Matthew Gregson, director, head of corporate at Howdens: “If there are elements of a programme that [an employer] would have loved to have got out of fixing, there's no better time to fix the problem than now."
If an employer is open and honest with its employees about what its reward approach may look like into the new year and the challenges it faces, staff will appreciate it more than simply being informed of what they will not be recieving.
"People hate it when an organisation turns around and says, ‘hey, we've done absolutely brilliantly but there's no bonuses'," adds Gregson. "If an organisation admits it's struggling and [that] maintaining jobs is its key focus, people kind of accept it.”
Short-term reward packages
Financial limitations and the unknown will also cause a long-term forecast of uncertainty when it comes to benefits strategy. Employers should be cautionary when it comes to tying themselves into a long-term reward package, says Ben Jones, executive board member at the Gift Card and Voucher Association (GCVA). “In the past, employers would have three-to-five-year reward packages," Jones says. "I think that's going to be a little bit more short-lived and organisations will be more drawn to tactical promotions rather than strategic ones. I think it's going to be really really challenging to know what to offer employees.”
Motivating employees with limited budget
Overcoming the negative impact of bonus and pay cuts or a lack of pay rises will be an uphill battle but employees will still appreciate small tokens of recognition. Changing an employer's mindset to offer more digital benefits is not always that easy, says Jones. However, he has seen an upturn in organisations turning to digital reloadable cards since the beginning of lockdown and believes they have their role to play.
“I think recognition will continue to form a huge part [of 2021] for different reasons," Jones explains. "It's about retention and keeping employees happy, when maybe before it was more about reward, it's more about keeping the status quo. If [an employee is] at home shielding or we’re on lockdown again, whatever it may be, gift card rewards are something that everyone can take part in.”
Supporting employee wellbeing
Pay rises may take a back seat in 2021 if the economic uncertainty continues. There will be a fundamental shift from monetary reward to the wellbeing of employees, says Gregson.
“Organisations used to attract people with big job titles, big basic salaries and a catalyst promise of ‘more, more, more’," he says. "What's really attractive to people now is about the social impact; it's about the workplace, it's about the culture, it's about the environment and that's why there's more and more overlapping of benefits. There's a lot of repositioning; who we like to work for, how an organisation can take an active role in an employee’s wellbeing and how they take an active role in society."
Employers will place more focus on how they collaborate and recognise employees’ differences and how they can remain well and healthy, both mentally and physically, as well as meeting goals, says Gregson. "The role that benefits are going to play to create healthier and happier employees,rather than it being about thepay cheque, is going to be a big change,” he adds.
Reconnecting the workforce
The next three years will see re-establishing organisational culture become a number one issue, which will lead to a greater level of retention, says Curzon. “You can’t have a company culture if people are disconnected or at home doing their own things,” he explains. “Some of the biggest benefits that people talk about are generally social or culture related; food, drink, gatherings, charity events, drinks trolleys.”
However, with a largely remote workforce, to keep the momentum up will prove an issue for the foreseeable future, he says.
“Some organisations live and breathe these social interactions," he adds. "Organisations that can’t operate how they want to will continue to struggle. How do we get people together? How do we get them to feel part of something?”
Supporting an organisation’s growth strategy in 2021
The foundation of an organisation's growth structure is its employees. If they are engaged and motivated their productivity levels will increase, which, in turn, will help boost business growth. Key to this in 2021 will be offering benefits that fully support employees' work-life balance.
"Employees will be looking at their employers and asking, 'what changes are you making to this reward strategy to help me and this new world I'm now working in?'" says Boland. "Employers need to be creating a good benefits structure. The fundamental benefits do not change but they help employees feel valued by the business, and how we do it in 2021 is going to change fundamentally."
