Since Covid-19 pushed many of us to work from our homes, many of the traditional employee benefits and compensation plans no longer fit.
Studies are revealing the extent that executives are going to to change their compensation and benefit strategies to align themselves. Deloitte found that “Sixty-nine percent of organizations say the changing nature of compensation expectations and strategies is important or very important for their success over the next 12–18 months, but only 9 percent say they are very ready to address this trend.”
Care.com found that “89% (of those surveyed) say that as a result of the pandemic, they are deprioritising at least one type of benefit.”
Executives disappointed with compensation
The same research from Deloitte, found that executives rated compensation negative 15 on the NPS, second lowest, above only performance management.
Correctly planning compensation, whether this is scaling as your business grows or ensuring people are fairly paid for their work, has come to light recently in the financial sector with Goldman Sachs.
While you can’t necessarily predict a global pandemic, you can put plans in place to make sure your compensation plan is adaptable and grows with you.
Having an agile compensation plan that grows and changes as you do as a business is one of the best ways to succeed.
If we look at start-ups and small businesses, compensation is often done on a case-by-case basis, and while that works in the early stages, over time this can cause complications.
From employees on different bonus schemes, to a lack of equality in equity, having an agile plan that scales with you is key. Here’s a few ideas as to how:
- Create a system that lets individual and company growth happen in parallel. As compensation is around 70% of a business’s outgoings, it’s important to ensure that the compensation is fair and scalable. You also don’t want to let the company grow but leave your team feeling disgruntled that their part in getting the company to grow isn’t rewarded.
- Think about teams and middle managers in your compensation growth plan. Perhaps you don’t have any right now, but as times change team positions may change too, and compensation should reflect that.
Automation vs compensation
Automation is becoming a bigger part of our lives, and workplaces too are greatly affected. From the AI first point of contact help desks to automated sales emails, people are seeing their roles change daily. This means that compensation, and upskilling, needs to reflect that. This isn’t to say you should cut pay when a job is automated. Instead review the job position and compensation and see what skills are transferable and how training can be provided to reskill and future proof both your people and your organisation.
The World Economic Forum estimates that 42% of the skills required from the global workforce will change between 2018 and 2022, and that by 2022, no less than 54% of all employees will require significant reskilling and upskilling.
Let society dictate your compensation
Less than 10% of those surveyed by Deloitte thought that ‘fairness of compensation relating to the national living wage’ was something they should be focusing on, but when you look at the outgoing cries for ethical workplaces, this just isn’t happening.
One study of workers in Sweden found that perceived fair treatment led to higher employee motivation and healthier lifestyle decisions. In America, another study found that women who were paid less were twice as likely to suffer from depression. Yet ‘equal pay day’ recognises that on average, for every dollar a man is paid, women are paid 87 cents.
In recent UK news, a lawsuit against Asda, a major UK supermarket, showed that equal pay debates are still ongoing, and that public interest is high.
This reflects a growing trend of consumers choosing brands that treat workers, fairly and compensate well. The rise of BCorp and similar sustainability targets for companies has only accelerated the demand for fair and transparent compensation, as well as ethical practices from the get-go.
Addressing relevancy in benefits
As we begin to head back to offices and workplaces, awareness surrounding benefits, and more pointedly, their relevance in a modern workplace, has never been clearer.
Benefits for care
Working from home, the requirement to home-school and care 24/7 has meant that companies are recognising the ability creating a flexible workplace has on their employee productivity. While such options had been researched and proven beneficial for years, there was never a wide scale adoption of flexible working until the strict global lockdowns.
50% of those surveyed by Care.com believe that the positive impact of care benefits outweighs the costs. And the same study found that increased productivity, especially amongst men, was noted as a positive outcome of increased care benefits.
There are many options for employers, from offering flexible work, where employees are given the autonomy to fit their working hours around their personal responsibilities, to more costly initiatives like providing childcare either on site or vouchers towards providing childcare.
But make sure to keep in in mind that care benefits aren’t just limited to childcare. It could be elder care, or care for a person with a disability.
Introducing a variety of care benefits can not only make your workplace more inclusive but help to address the number of women leaving the workforce. By bringing in a policy of a flexible approach to care, whether you choose to allow flexible working or introduce subsidised childcare, you are creating a workplace where everyone feels that they can successfully balance caring and their work responsibilities.
A more open approach to time off
While some countries have set a minimum number of days for annual leave, many countries do not.
In light of COVID and home working, many more people have come to appreciate the need for flexible and regular time off.
A SHRM survey found that more than half of employers asked had made changes to their time off policies, offering more flexible approaches to their holiday allowances, including removing restrictions on types of holidays that had to be taken.
How can employers instigate such a policy?
- Create a policy of personal days, whereby people can take a day without needing to say why. This can help to remove fear around taking sick days when people don’t want to come into work for mental health reasons.
- Remove restrictions on numbers of days for certain categories. Rather than forcing employees to take holiday in no more than one-week stints or restricting the number they can take for certain reasons, make it more open and less regulated.
In conclusion, modern employee benefits need thought and consideration, but also need to be more employee led. The historic benefits that have been led by minimum requirements or for competition in an intense job market can now migrate to a flexible, employee led and coordinated approach that works to remove discrimination, and improve employee wellbeing.
Written by Steven Cox, Chief Evangelist at IRIS FMP, a leading global international payroll provider to SME organizations offering a wealth of services and solutions to help keep international payments efficient, reliable and in line with their business goals.