Four trends in reward and benefits strategies for 2023
Almost one fifth – 19% – of employees expect to have to look for a new job with better benefits or a higher salary in 2023, equivalent to 5.4 million people, according to research commission by Unum with Censuswide.
This comes at a time when UK job vacancies fell by 3.6% in August to October — the fourth consecutive fall, according to the latest ONS data.
Earnings have grown more strongly than forecast in 2022, driven by the tight labour market. However, with inflation rising to 11.1% in the year to October, earnings growth has fallen behind and the gap between wage growth and price growth is the highest for decades.
So, without just continually inflating salaries (which is commercially unviable for most businesses), how will companies attract and retain staff using their reward and benefit strategies during the cost-of-living crisis?
Here are some trends to be aware of for 2023 reward planning:
1. Access to health and wellbeing support
Unum’s research found that financial worries are affecting both physical and mental health, with 40% of employees saying they have low energy, 32% are unable to sleep and 25% are so worried about their finances they’re feeling depressed.
Help employees build financial resilience through a specialist financial education platform and signpost them to relevant employee assistance programme resources and shopping discount perks.
Also, with the NHS experiencing record high numbers of people awaiting treatment, employee demand will likely continue rising throughout 2023 for access to digital GPs, virtual mental health and physiotherapy services.
2. Hybrid working
Covid-19 accelerated trends of working from home and hybrid working, which is set to continue in 2023. While companies can’t stop employees from looking for new opportunities, research from Glassdoor indicates that employers who offer their staff a good hybrid working experience are likely to have less turnover. But there is no single solution.
The key to successful hybrid working is creating a workplace community and culture that supports employees professionally and personally so they can achieve a healthy work/life balance.
3. Inclusive benefits and intergenerational reward
With people living and working longer than ever, the multigenerational workforce looks set to keep growing. Here we see pressures are stacking up on the so-called ‘sandwich generation’, who are caring for elderly parents and dependent children.
Employers should invest time in understanding and identifying which benefits are most appealing to each cohort within their workforce and create a comprehensive diversity, equity and inclusivity policy to answer those unique needs.
4. ESG rewards
Environmental, Social and Governance (ESG) has rocketed up employers’ agendas in recent years. Ensuring a joined-up approach to engage employees in your ESG commitments will be the key to success in 2023, both in helping establish a socially responsible business and for attracting and retaining staff who are fully invested in your corporate values.
Deloitte’s 2020 Global Marketing Trends Report shows that purpose-driven companies are 40% more likely to retain talent than their competitors. Offering variety and flexibility in your activities will allow employees to choose the type of activities that resonate with them and create a lasting impact in society.
And including ESG options in employee benefit packages, such as introducing an electric vehicle or cycle to work scheme, will in turn help staff to reach the office in an environmentally friendly manner.
