How can pay and benefits meet the changing needs of the modern workforce?

Business Insights
18/05/2022

Steve Sweetlove, Pay and People Partner, RSM UK


The pandemic has accelerated a huge shift in employees’ attitudes to their careers that was already emerging before anyone had ever heard of Coronavirus. Prior to this we were already seeing a wellbeing movement that meant jobseekers had started shunning large corporates in favour of smaller companies that offered greater flexibility, more consideration for employee wellbeing, and a shared common purpose. It seems that for generation z it’s not all about the money, but businesses that adapt to meet their requirements might naturally reap the rewards. RSM’s ‘The Real Economy’ report found that over half of middle market business leaders surveyed felt the health and wellbeing of their staff was very important to the success and growth of their company.


I’m also hearing this viewpoint from many of the clients I speak to. Instead of relying on higher salaries to attract talent, they are now thinking more strategically about how to use workplace incentives and flexibility as tools for recruitment, engagement and retention. Flexible and hybrid working are no longer a perk but an expectation. Employers are realising that offering benefits that prioritise overall employee wellbeing can ultimately attract the best talent, improve retention, reduce recruitment costs and boost the bottom line.


We are now seeing more businesses offer initiatives such as wellbeing days to support mental and physical health. Some companies are offering employees an extra day of annual leave to boost wellbeing in addition to their usual annual leave entitlement. Many companies are also increasingly seeking improved health insurance options for their staff which include cover for mental healthcare, therapy, and out-patient treatment.


The recent BBC Worklife series looked at changing working patterns as a way to enhance productivity and provide a better work-life balance for employees. This examined the introduction of four day working weeks, something which is currently the subject of a huge pilot study of 3,000 employees across 60 companies. In many cases this involves working longer hours across four days to allow for an extra day off each week. There are pros and cons to this kind of working pattern, and while it has been embraced by some, others argue it can create a more stressful, less collaborative environment as employees struggle to cram everything into fewer days. The BBC programme questions whether businesses should instead consider more bespoke working patterns which provide employees with greater flexibility without pushing people to have non-working days if they prefer not to.


Some organisations have opted for the introduction of compacted hours, such as a nine-day fortnight, which can create a greater work life balance. Often leadership teams worry that introducing new working patterns for some could encourage more people to want to follow them. Unless businesses are looking to introduce something new throughout all teams and departments, it’s important that any individual arrangements are reviewed on a case-by-case basis. For any company-wide changes in working patterns, eg hybrid or home working, its important to track engagement among workers regularly to make sure it’s still working for people, and aim to strike a balance between what employees want and what employers need to remain agile and forward thinking.


Although a ‘one-size fits all’ approach might not always work, by offering just a few people something different to aid engagement and retention, employers risk creating a divide among employees, or inadvertently setting a precedent which could be difficult to reverse later. Careful planning is therefore crucial before introducing any new patterns of working to avoid creating productivity issues or a divisive workplace culture.


In response to recent inflation and price rises, some of the employers I work with are also now considering whether they can offer any employee benefits that help them address the cost-of-living crisis. One client is considering ways of offering staff allowances to contribute towards the increased monthly cost of electricity and gas bills on a temporary basis. They are an international business which has seen that the Netherlands is offering 800 EUR to minimum wage groups to help cover this.


Experts in pay and benefits predict there will be a move away from the more traditional salary, plus bonus and benefits, to a more agile and innovative model, with greater emphasis on incentive schemes, individual and team- based bonuses and other bespoke options which enable employees to build their ideal reward package, based on individual needs. Wellbeing practices and individual development opportunities will also be key to retention, so businesses will need to think creatively and move with the times to retain the best talent.


The Chartered Institute of Professional Development (CIPD) says employers need to get better at consulting with employees on their preferences for working patterns and staff benefits if they are to stop the effects of the great resignation and lower engagement levels. In addition, line managers need to become more adept at managing performance in terms of individual and team development to retain their top talent.


Steve Sweetlove can be contacted at steve.sweetlove@rsmuk.com

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