Why it's time to rethink your reward and compensation strategy
You may think that employees are only interested in financial rewards, especially during the cost-of-living crisis, but this isn’t the case.
In fact, you should take a step back and look at the concept of reward entirely. In HR circles, rewards are generally part of a recognition strategy linked to performance, but this mindset needs to change.
Rather than dangling the carrot, withholding reward until a desired action has been completed, give employees what they need to enable and empower them to achieve your objectives.
Consequences of the cost-of-living crisis
The cost-of-living crisis isn’t just affecting people financially; their mental wellbeing is also suffering. Research tells us that 59% of UK adults say that their mental health has suffered during the crisis.
Poor mental health leads to reduced productivity, costing businesses £21.2bn annually.
A reward strategy that focuses only on achievement isn’t going to work because mental health isn’t straightforward. We can’t incentivise people out of illness. We have to offer help.
As well as the mental health repercussions, employees’ finances are also taking a hit. Like the rest of the UK, employees face rising costs on their essentials – food, fuel, and energy – and many will make cuts in other areas to afford these increases.
Put simply, their salaries aren’t stretching as far as they once did.
Help employees achieve their potential – and your objectives
Focusing on employees’ financial, physical, and mental wellbeing can help create an engaged, motivated, and resilient workforce. People will be present, productive and more likely to work at the level needed to achieve the business and individual targets.
Mental wellbeing: Provide an employee assistance programme that includes a 24/7 counselling service available via phone, email or app. In isolation, anxiety and depression will worsen, but with professional support at their fingertips, you’re offering employees crucial support when needed most.
Financial wellbeing: It’s within businesses’ power to relieve some of the financial burden by helping employees save in areas where they’re being hit the hardest. An average family of four spends around £129 on their weekly shop. An employee discounts platform offering discounted supermarket vouchers is a great way to help employees save money.
With a potential discount of 6.5% (for example), a £129 voucher costs £120.62. That saves £8.38 every time your employees use this method to pay for their weekly shop. When repeated every week of the year, there’s a possible total saving of £435.76 to be made - and that’s just in one area of spending.
Physical wellbeing: Research shows that many Brits have cancelled their gym memberships because of the rising cost of living. You can help them feel their best by offering discounted gym memberships as an employee benefit.
Reward with choice: Even though we’re encouraging you to help people achieve their potential through providing wellbeing benefits, you should still find meaningful ways to thank them when they do.
To keep motivation high, celebrate achievements.
The best rewards are those that make an impact, and to do that, they need to be personal – evouchers and gift cards are a fantastic option because your employees can choose where and how to spend them.
Reward with experiences
To save money, many people are cutting back on eating out. Arranging a whole business or team social event is a fantastic way to celebrate success collectively. In a digital world, where hybrid and remote working is becoming the norm, employees will appreciate the social connection.
Plan an away day, a party or even a meal out. Better still, organise an award ceremony to recognise and reward those who have gone above and beyond. Even if it’s only internal and among yourselves, the gesture of thanks will be appreciated.
While a reward and recognition strategy is still essential, we need to reverse the process, giving, reinforcing and supporting, so employees can drive your business to success.
In partnership with Pluxee UK
Pluxee UK, is a leading employee benefits and engagement partner that opens up a world of opportunities to help people enjoy more of what really matters in their lives.
