Need to know:
- Flexible working continues to be a top trend for 2019, as work-life balance remains a key priority for employees.
- Technology can help create the consumer-based experience that employees increasingly expect from their interactions with benefits packages.
- Employers must take into account changing attitudes to career trajectories, and the presence of a wide range of generations in the workforce.
- Creating an individual value proposition rather than an employee value proposition will increase personalisation and better engage employees with their reward package.
Creating an engaging total reward strategy is a key factor in attracting and retaining employees. To have a strong impact in the modern age, a benefits package must exceed the usual insurances and pensions.
The Reward management survey, published by the Chartered Institute for Personnel and Development (CIPD) and LCP in November 2018, confirmed that 97% of the 568 managers polled are planning to either maintain or increase their total reward spend in 2019 and 2020.
Charles Cotton, senior reward and performance adviser at the CIPD, says: “One of the drivers behind employers' decisions in 2019 is the fact [that they] want to invest in employees due to the concern about what impact Brexit will have on employees' financial wellbeing, and what they can do to protect them.”
According to the CIPD's report, professional development, health and financial wellbeing are the areas most likely to attract additional spending within the next two years.
With this in mind, what are some of the key total reward trends that will shape the approach of benefits professionals in 2019 and beyond?
The virtual workplace
Not all rewards need extensive financial investment. Research by financial adviser Drewberry, published in November 2018, found that 42% of UK employees at small to medium enterprises (SMEs) cite flexible hours as their most desired benefit.
Jeff Fox, principal at Aon Employee Benefits, says: “Flexible working is massive. If employers offer the freedom for employees to work wherever they want, if technology allows it, then employers will have access to the best talent.
"It's often overlooked in the debate about total reward. When [employers] frame their strategy, it's important to think beyond traditional pay and benefits. They naturally have a place, but are not always enough anymore.”
Failing to offer flexible working opportunities, on the other hand, might give the impression that an organisation is unwilling to compromise or promote a positive work-life balance among its employees.
Cross-generational benefits
“An employee used to work for an organisation for 50 years and then retire at 60," notes Fox. "Now it’s a more mosaic world where people start work at different points, as graduates, apprentices or an experienced hire, and an employee may not stay at a particular organisation for very long."
Changing career trajectories have shifted attitudes to longstanding benefits staples, such as long-service awards, and created the need for more immediate pay-offs to inspire loyalty among employees. In addition, employers must be aware of the vastly different wants and needs among staff, not least due to the presence of multiple generations. As can be seen with the increasing demand for flexibility, there are fundamental, and ongoing, shifts in priority within the modern workforce.
“Pay and traditional benefits don't motivate millennials in the same way that they do for the older generation," explains Fox. "Generation X prioritises pensions and private medical insurance, but it's not the same for millennials. Organisations are having to look at aspects of a reward deal that appeal to the broader workforce."
Embracing new technology
Not only are workforce demographics driving change, but innovations in technology also have the potential to shape how employers present and communicate benefits. The vision for the future is to explore capabilities outside the realms of benefits portals.
“Employees expect a consumer-based experience from an app, rather than sitting on a [computer]," Fox states. "This approach will be huge in 2019. Employees will expect to interact in the same way with their benefits as they do with Amazon. They want to have a similar experience and get things when it suits them, on their phone, tablet or maybe even as advanced as wearable technology.
"Employees want to get notifications from their employer to say ‘we know you have this benefit but you haven't used it yet. Are you happy, do you understand how it works?’ That's how technology will come into play in 2019 and beyond.”
Engaging and personal
Increasing take-up and engagement with benefits is a consistent concern for reward managers; to combat this, an effective communication strategy is crucial.
Jack Curzon, head of scheme design at Thomsons Online Benefits, says: “Communicate, rename and reinvigorate [the] total reward strategy. If [employers] want to change or refresh it, even better. The total reward package should be all-encompassing. Engage employees and they will go back to it every day.”
Creating an individual value proposition (IVP), a more personalised version of an employee value proposition (EVP), can be particularly advantageous, Curzon adds: "Employees are increasingly wanting a more personal feel to their total reward package. They want to feel that their organisation cares about them. Getting that across as part of [the] total reward strategy is more powerful than ever.”
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