REBA Inside Track: Reward and benefits professionals: experts in pivoting
“Pivot. Pivot!” For those familiar with the American sitcom Friends hopefully this quote will bring back recollections of Ross and his friends trying to manoeuvre a large sofa up a flight of stairs, round a 90 degree corner.
It seems to me that reward and benefits professionals are now also carrying out an equally difficult procedure, to pivot to the next challenge.
Employers were faced with two years of ensuring benefits were geared up to support employees during the pandemic, but reward and benefits professionals will once again be tested by the looming cost of living crisis.
As we are all acutely aware, the energy price cap is rising by 54% as of this Friday, inflation is expected to increase further in coming months, to around 8% in the second quarter of 2022, interest rates have climbed to 0.75%, and National Insurance is also increasing as of April.
The financial outlook for the months ahead does not look favourable, with concerns that inflation will reach double digits for the first time in 40 years. For employees, it will mean a sustained pressure on wages, pushing many into poverty and forcing others to make difficult lifestyle decisions. Employers will also have to be mindful of their own costs.
As ever, the reward and benefits community is already in full pivot mode, with reward and benefits packages being adjusted to offset some of this impact.
Figures released by XpertHR reveal median pay awards stand at around 3% - the highest in nearly 20 years. And although this is a positive move, it still amounts to a notable real terms pay cut, as the gap between wages and the cost of living continues to widen.
Insight from rebaLINK reveals that our members have also been busy communicating with their employees. They have been sending reminders about benefits packages that can offer high street discounts, and the advantages of salary sacrifice benefits, as well as using financial wellbeing channels to make employees aware of the impact of rising National Insurance contributions and the income tax bracket freeze.
But, ultimately, even with reward and benefits professionals throwing all they’ve got at employees to mitigate cost of living rises, there is only so much they can do to practically help employees. What comes next is supporting those who do find themselves in a difficult position.
Much as employers pivoted to support the mental wellbeing of staff during the pandemic, they now need to turn again to ensure employees’ wellbeing, both financial and mental, is front and centre.
Financial wellbeing is a somewhat taboo subject. Similar to mental health, people don’t like to talk about it. And other than the odd complaint about the cost of petrol and electricity, knowing if an individual is having financial difficulties is problematic.
And so it comes back to the idea of knowing your employees and having an open, supportive workplace culture. Managers and mental health first aiders need to be on the lookout for those who may need additional support, whether it be through signposting to debt charities such as StepChange, or counselling to help ease the pressure that money worries can bring.
Encouraging conversations about finances and building trust around financial wellbeing can also help employees to feel more at ease about sharing any issues they may be facing.
Employee wellbeing is certainly more important to organisations now than it was before the pandemic. But now, reward and benefits professionals need to once more pivot to ensure their strategy is aligned to support employees through the cost of living crisis. A challenge they are well prepared for.
Next week REBA will be launching a survey to understand employers’ objectives on financial wellbeing, as well as what they currently offer and plan to offer. Keep your eyes peeled.