Need to know:
- Employee motivation strategies need to factor in cost-of-living pressures and the increasing need for personal development.
- Motivating people to return to the office must be carefully balanced with the motivational aspects of the flexibility of remote and hybrid working.
- As skill shortages continue, reskilling and upskilling staff, particularly in digital skills, will become increasingly motivational in terms of personal development.
With the prospect of another tough year ahead for the UK economy, the pressure is on organisations to find ways of boosting productivity and hitting growth targets. Key to achieving this will be finding the most effective ways of engaging and motivating their employees in the year ahead.
From ongoing talent shortages and retention challenges to changing working patterns and the current move to lure hybrid and remote workers back to the office, one thing is certain; motivation, recognition and reward will be key for employers.
Supportive employee experience
The most effective motivational strategies will be shaped by the challenges facing employers and the priorities for employees in the year ahead. Wellbeing ticks both boxes. However, the definition of employee wellbeing is continually evolving and an employer’s benefits and motivation strategy must now factor in cost-of-living pressures and the increasing need for personal development. Chris Last, strategy director at Vivup, explains: “Wellbeing policies mean supporting those who need it across a range of life stages; not only those who are caught up in the ‘sandwich generation’ of looking after their children and their elderly parents but also those just starting in work who face financial pressures.”
Return to workplaces
Another big area of focus for employee motivation in 2024 will be the continued pullback to the office. Even an extra day a week of commuting to work has financial implications that further squeeze family finances. “Stretching net pay, for example, by offering season ticket loans, or maximising opportunities to save money through salary sacrifice [arrangements], will be of significant value to employees,” says Last.
However, employers also need to consider the potential implications of return to the office policies, as research from employee benefits and engagement firm Pluxee UK, published in December 2023, shows that 17% of UK employees would reconsider a job change on the basis of confirmed flexible-working policies.
Recruitment challenges
A difficult recruitment market will also continue to impact organisations next year. With businesses facing a variety of increased costs throughout 2023, motivating employees through salary increases has been a challenge. Unfortunately, this pressure is unlikely to ease during 2024, says Matt Russell, chief executive officer (CEO) of Zest.
“Given that 2023 has been a candidate-driven market, businesses have had to find cost-effective approaches to attract, motivate and retain talent and many are doing this by investing in their reward strategies,” he says. “People don’t just want benefits, they want ones that are relevant to them, so personalisation should be a key point heading into the new year.”
As employee expectations continue to evolve and the need for top performers continues to be a business priority, employers are already making changes ahead of the new year, says Bar Huberman, head of HR strategy and practice at XpertHR. “The pressure is growing to create an attractive offering that walks the line between what employees expect versus what the organisation can reasonably afford,” he says.
Employee benefits now play a critical role in the overall remuneration strategy, according to Zest’s Responding to the cost-of-living crisis report, published in December 2023, which shows that 42% of employees say that benefits are their most important consideration when seeking a new role. “People don’t just want benefits, they want ones that are relevant to them, so personalisation should be a key point heading into the New Year,” adds Russell. “This could range from targeted financial support to ease cost-of-living pressures to flexible working hours; even the most cost-effective benefits can be incredibly effective if the solutions are tailored to the individual.
Where many organisations started 2023 with a string of workforce reductions and layoffs, the fading threat of a recession means that the demand for digitally skilled talent has rapidly risen again, making skills training an increasingly important element of the employee motivation strategy.
As Cathy Mauzaize, president of Europe, Middle East and Africa (EMEA) at ServiceNow, says: “With skilled tech workers in short supply, businesses will need to amplify investments in upskilling and reskilling to build capabilities internally, especially around [artificial intelligence (AI). Offering robust training programmes and learning opportunities will also be key to attracting and retaining top talent. [Organisations] that invest in their people’s growth will gain a long-term competitive advantage.”