33% of employers have reviewed sickness policies due to Covid-19

33% of employers have reviewed their sick pay policy due to Covid-19

One-third (33%) of employers have reviewed their organisation’s sickness policy due to the Covid-19 (Coronavirus) pandemic, according to research by Paydata.

Its UK reward management survey – Autumn 2020 results, which surveyed 204 HR and finance directors and reward and compensation specialists, also found that two-thirds (66%) have not, and do not intend to, review their sickness policies, after experiencing a decrease in sickness absence levels.

The report also found that approximately a quarter (24%) of respondents are currently operating a pay freeze, up from 12% in spring 2020, while 16% predict pay freezes in 2021.

Just under half (48%) of respondents carried out pay reviews as planned, while 32% of respondents are planning to pursue an across-the-board pay increase. April is the most popular month to do so, which may account for the fact pay budgets remained at 3% in 2020, despite being predicted to fall to 2% in 2021.

Over two-thirds (70%) have implemented out-of-cycle pay increases, while 69% anticipate doing so in 2021. This is a decrease on the 88% which used out of cycle pay increases in 2019, and 87.5% which did so in 2020. Approximately three-quarters (76%) cited market pressures as a driver for using out-of-cycle pay increases, while 53% cited internal pay alignment and 26% listed pay or scale restructure.

Three-quarters (76%) of respondents currently operate bonus schemes, however, 25% said it is too early how many staff will receive bonus payments. An additional 33% of respondents said it is premature to predict the size of bonus payments.

As a result of the pandemic, the vast majority (94%) have offered homeworking arrangements, while 80% have offered flexible-working hours. More than four-fifths (86%) continue to encourage remote working, while 52% expect to make flexible working more readily available next year.

Furthermore, 90% of organisations have policies in place to support mental health and wellbeing. The most popular workplace initiatives in this area are employee assistance programmes (EAP), offered by 91%, access to counselling services (89%), and flexible-working hours (87%).

The most common challenges faced by respondents in managing mental health at work, meanwhile, are communication challenges (48%), workplace stigma and perceptions (36%), and lack of clarity over how to measure success (36%).

Over one-third (35%) of employers have a dedicated budget for mental health and wellbeing programmes, up from 28% in autumn 2019. Just over three-quarters (76%) of respondents cited the benefits of doing as the value of being seen as a caring employer, 66% have seen an increase in engagement and 65% believe that employees’ work-life balance has improved.

Tim Kellett, director at Paydata, said: “Extraordinary challenges continue to face employers which have needed to remain agile since March of this year. In a year defined by the pandemic, our research has identified the key challenges that continue to face employers.”