In an article published in autumn 2018, The overlooked essentials of employee wellbeing, McKinsey drew attention to what’s an often-overlooked form of ‘reward’ for employees – namely the benefit of giving people more influence over their work life. Flexibility in devolving control from employer to employee was said to foster higher levels of physical and mental health among workforces.
In practical terms, this thinking may enable employers to situate employee wellbeing and to tailor their employment proposition holistically: emphasising what employees truly value. Altering an overriding traditional focus on ‘objective’ elements. i.e., rigidly packaged pay and non-pay benefits, the intention would be to create the conditions facilitating employee financial wellbeing, broadly defined; their engagement and commitment to sustained high performance.
What’s the evidence that employers ‘get’ this message? That’s one of the questions we investigated in the Reward management survey for the Chartered Institute of Personnel and Development (CIPD), published in March 2021. On the positive side, in response to Covid-19, 42% of employers claimed to have or be making plans to explore the pandemic’s financial effects on the workforce. But almost half of employers told us they have no policy in this area and in the same proportion gave the reason as senior management not seeing having one as a priority. These findings suggest that the HR community can add value to their organisations by making sure corporate leaders understand the issues in play and the business case to act, at least to find out the degree of value their employees perceive in this area of their relationship with their employer.
Supplementing our statistical number-crunching from the survey, findings from a focus group of senior HR practitioners included the need to pay attention to the different impact current times are having, contrasting sectors where a majority of employees occupy ‘comfortable’ relatively well-paid roles with those in sub-sectors employing lots of minimum-wage workers. Family contexts were flagged too. Choices might be altering the balance of a flexible benefits portfolio, to mitigate the impact of a life-partner losing some or all their own employment and reward. Alternatively, caring responsibilities may induce an employee to make unusual carer’s leave drawdowns.
Informed, thoughtful innovation is at the core of what’s needed to keep pay and benefits relevant, especially in the current climate. And, if employers draw the right lessons, it is likely to be popular in the post-pandemic era, especially in circumstances where cash-flow considerations may limit scope to make significant enhancements to bonuses or pay rises.
Stephen J. Perkins is emeritus professor at London Metropolitan University