The challenging global climate has put a lot of pressure on pay budgets. Employers have seen workforce costs increase, with rises such as the minimum wage and the increase in the minimum contributions that employers pay into pension schemes.
Conversely UK workers have had the worst wage performance, suffering the biggest drop in the average real wages of any OECD* country, with the exception of Greece.
Whilst financial benefits do not automatically equate to higher productivity they are a key factor to any engagement, recruitment and retention strategy. Traditionally salaries were used to attract the best talent to an organisation and they will always be important.
The modern employee
However, the modern employee is attracted by a whole range of financial and non-financial rewards and these can change throughout the lifecycle of the employee. For example, someone who is starting their career may be more interested in learning and development opportunities. Or a new parent might prefer flexible working opportunities.
Rewards package
Great workplaces will recognise this and use a range of rewards and benefits to attract and retain employees, which in turn will drive engagement and productivity.
Designing a rewards package that understands and rewards the needs of your employees, whilst having a strong attachment to the mission, goals and objectives of the organisation will be integral to its success.
Savvy organisations will benchmark pay and benefits against competitors. Having pay structures provide a framework for valuing jobs in the marketplace and within the organisation. When setting the size of the overall company-wide pay review budget, organisations will need to factor in inflation; market rate changes and the ability to pay it.
Pay progression systems and pay awards can help employees to understand how to and achieve higher pay within their pay level band or through their performance.
Flexible and voluntary benefits schemes allow employees to vary their pay and benefits package to suit their individual requirements.
Employers should consider non-financial rewards including learning and development opportunities; flexible working and employee collaboration so that workers are involved in decisions that affect work and working conditions.
*The Organisation for Economic Co-operation and Development