REBA Inside Track: Reset, reshape, rejuvenate
The profile of reward, compensation and benefits took centre stage in 2022. Big-picture news issues like the cost-of-living crisis, industrial action – even the future of sustainable energy supplies – all link to reward and benefits practices.
While addressing these external factors, reward and benefits professionals were also responding to a host of internal business issues, from business restructuring to attracting a new blend of skills and experience into organisations.
The maelstrom of change shows no signs of slowing as we move into 2023. Reshaping programmes to drive high performance, sustainable and resilient businesses will need agility, innovation and creativity. Reward and benefits have never been more strategically important.
Here are my top five key trends employers need to keep their eye on during 2023:
Employee experience. Soaring inflation, energy bills and housing worries have meant that the basic priorities at the bottom of Maslow’s hierarchy of needs, such as food, warmth and security, are now coming onto the radar of employee benefits, especially for lower-paid workers.
Employee welfare and wellbeing will need to be at the heart of reward and benefits decisions in 2023.
Supporting older workers. In May to June 2022 (the latest figures available) there were more economically inactive adults aged 50 to 64 than before the start of Covid-19. Just over a third (36%) had chosen to retire – which might not raise eyebrows at the upper end of that age bracket. But at the lower end (50- to 54-year-olds) this figure falls to less than 10%. In that age group, stress (19%) and not feeling supported in their job (17%) were more significant factors for leaving the workplace. Just under a fifth (18%) said that they were on an NHS waiting list for medical treatment.
With talent shortages hindering business productivity, and retirement savings adequacy (see below) a concern for this age group, both businesses and individuals will gain from more focus on the older workforce.
Retirement and workforce planning. In REBA’s 2022 Financial Wellbeing research, we found that just 29% of businesses believe they are very good at supporting employees’ retirement planning. And, a mere 7% said that they are very good at supporting budgeting and money management.
Now, retirement savings inadequacy is starting to emerge as a business risk. New proposals from government will put more emphasis on mid-life MOTs and helping employees better understand how much money they will need for retirement. This will also help employers with workforce planning, both in terms of making adjustments to retain older workers, and predicting when individuals with valuable experience and skills might choose to leave.
Gender-focused benefits and diversity, equity & inclusion (DEI). The gaping gender pensions gap is just one of the issues for female-identifying employees. Recruiting and retaining females, as well as addressing historical imbalances in career and leadership opportunities requires new ways of thinking about benefits, both within specific offerings (such as private medical insurance) and strategically (such as support for parenting and childcare).
Progress will be made at government level, through initiatives such as the Women’s Health Strategy for England, but it is also up to employers to create a working environment where women can thrive. Benefits play a big role in that – whether it’s financial wellbeing that works for flexible career paths or mental health support that recognises the stressors that women face.
But DEI doesn’t end with gender focus. Employee benefits, in tandem with wider HR objectives, have the potential to power charge equity at work across ethnicities, parenting (not just for women), sexuality, disability and many other characteristics. But it can mean different thinking, and hard-hitting conversations with suppliers.
Data and health. The pressures on the NHS have been immense in 2022, not just as a result of Covid-19, but also wider staff and resource shortages. With waiting lists for routine operations still impacting individuals’ ability to work effectively, helping employees to access health services will be vital – but so will understanding the aspects of healthcare that can have the biggest impact in individual regions and businesses.
Using public data sources, such as the Office for National Statistics, benchmarking data, along with individual workplace measures, will help employers to identify and address the health issues that are most important to their workforce.