Time for new thinking: Why we need to do things differently
It is time for employers stop doing what they’ve always done, and instead step back and rethink the way they approach reward.
If you do what you’ve always done, then you’ll get what you’ve always got.
This quote is largely attributed to Henry Ford although many question its origin.
Henry Ford also said “If I had asked people what they wanted, they would have asked for faster horses”. I’ll expand on that that later. But, coming back to my original point, it stands to reason that if we continue to repeat the same actions we will only ever achieve the same result. So isn’t it about time we did things differently? It’s time to stand out from the crowd in 2017.
There are some very clear themes arising from New Model Reward 2017, the report we have produced in association with REBA. The current reward model needs revitalising. National Living Wage and rising house prices are putting pressure on current salary levels and nobody seems to have a pot of gold sat in a cupboard somewhere to fund big pay rises. Throw into the mix the increase in auto-enrolment pension contributions from 2018 and it’s hard to see how life gets easier from here on in.
But let’s be glass half full about this; solutions do exist. We may not be able to fix your gender pay gap reporting obligations, but we can help with some other areas.
The reduction in lifetime and annual allowances are putting pressure on reward professionals to offer a viable alternative to pension contributions. Let’s be honest, just paying extra salary in lieu of pension contributions isn’t very imaginative. The research shows that one in five of us are now looking at workplace savings vehicles. Our own experience from talking to our clients is far higher than this. A year from now I expect one in five won’t be looking at it, and they’ll be left behind.
Rising house prices mean those joining your workforce have never felt further away from owning a property. We’re also seeing the first wave of young people leaving university that have had to pay the full £9,000 per annum tuition fees, so student debt is even higher. There are dozens of articles written on the impact of millennials joining the workforce, so isn’t it about time we did something about it? Why not give them a genuine workplace savings vehicle that helps them clear debt and save towards a house?
Add in extra incentives around service and saving for three or five years. Then you can roll your long-term service awards in and actually get something back from a part of your reward budget that might currently be delivering very little. This ties in quite nicely with my first point and meets the needs of more than just your higher earners.
All of this at a time when auto-enrolment costs are increasing from 2018. Yet the never-ending challenge of engaging employees in their pension goes on. What if pension wasn’t the only answer?
Financial wellbeing continues to be a concern for many employers in the UK. How about having a genuine workplace savings vehicle to run alongside and complement your pension strategy?
The above information focuses a lot on workplace savings and pensions. There are so many ways in which you can be creative with your benefits to enhance your reward strategy. The research tells us that there will be a shift towards doing more through benefits in the coming years. No two employees are the same; no two employers are the same. So I can’t suggest a one-size-fits-all solution. But I’m sure certain that there are numerous ways to help you as you face the ever-changing reward challenges without costing you the earth.
So, back to Henry Ford and giving people faster horses. If you ask your people what they want, they’ll simply say more money, which isn’t sustainable. Imagine for a moment if Henry Ford had simply tried to make horses run faster...
Download the full 46-page PDF report here: New Model Reward research 2017. REBA members access the research for free.
For further in-depth discussion of this topic with senior HR and reward professionals, sign up for REBA's Reward Leaders' Forum on 27 April 2017. REBA Members can attend for free.
Andrew Drake is head of rewards and benefits consulting, JLT Employee Benefits
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