The past four years have been the most turbulent in the corporate world since the 2008 financial crash. Businesses have had to grapple with significant shifts in employee demands prompted by the Covid-19 pandemic and its acceleration of hybrid working, as well as an environment that has presented continual economic challenges. Decision makers, already required to juggle costs and profits, now need to exert an increased focus on addressing employee demands – a balance which is leading to a squeeze on resource, time, and effort.
Finding the equilibrium between cost and benefit in relation to employee spend is a fundamental component of leadership. Identifying strategies to enact reward and benefit propositions, and effectively manage these, will be at the forefront of planning in 2024 and beyond. Whether this means overhauling business practices, prioritising – or deprioritising – employee values and demands, or changing employee spend, there are a variety of factors which will be key to success over the next year.
Of course, each business is different, and will require innovative solutions to unique sets of challenges. For employers, understanding the ‘DNA’ of their business is the key to unlocking practical, sustainable ways to positively impact employee retention as well as maximising return on investment.
The ‘new’ new normal
The pandemic heralded ‘the new normal’, accelerating changes in employee demands and ways of working faster than anyone could have predicted. The working landscape has since changed permanently, and employees are more empowered to strive for increased flexibility, better benefits packages, and more of a focus on values and purpose.
Research from the Chartered Institute for Personal Development found:
- 66% of businesses believe including flexible working as an option in job advertisements is an important factor in attracting talent.
- 40% of employers have seen an increase in requests for flexible working since the pandemic.
- 39% of businesses say they will be more likely to grant flexible working requests compared to before the pandemic.
The appetite to grant flexible working could change once the impacts from the wake of the pandemic and economic uncertainty begin to subside. This, alongside the emergence of three stand-out trends, is putting more businesses under pressure to increase spend to address employee demands and improve, or at least maintain, loyalty and retention rates.
The ’great resignation’ has perhaps been the most prevalent shift across the workplace, with many employees re-evaluating their priorities and leaving their roles in droves. While this trend has started to subside in the USA, it is still prevalent in the UK.
Barnett Waddingham’s research found over a third of employed people planned to look for new, or additional, work to combat the cost of living, rising to almost half of those aged 18-34.
But it’s not just about money – the shift to more flexible ways of working and a higher focus on company values is a critical consideration. Employees require more than just increased pay to stay in a role, with research from LinkedIn suggesting over a third would leave their role if they were required to return to the workplace full-time. For professions where hybrid or remote models are not an option, such as doctors or factory workers, company values and additional workplace benefits such as development and training support will be decisive factors.
This has also contributed to the two other people-first trends – quiet quitting and the war for talent. Quiet quitting involves employees losing interest and essentially putting in the bare minimum amount of effort to carry out their job which can also lead to increased absenteeism. The war for talent is perhaps a more challenging factor for businesses, especially those with weaker retention rates. With an increase in employees looking to change roles and searching for jobs armed with a robust list of demands, many companies are struggling to find and retain adequate talent to fill vacant roles. While offering higher salaries may seem like a straightforward solution, it is simply not feasible if we hope to keep a lid on the UK’s inflation.
For many companies it may be a case of adjusting to a new environment.
This means it is not necessarily about increasing employee spend, but instead reviewing how and where it is spent to be more effective. This is where investigating Employer DNA can highlight and map-out areas requiring investment, and where spend could have more of an impact.
- Read the rest of The Employee Equation, Barnett Waddingham’s new data-led article and discover why employers must understand their business’s unique ‘DNA’ to unlock sustainable ways to positively impact employee retention and development while maximising return on investment.
About the author
Julia Turney is a Partner at Barnett Waddingham with responsibility for developing BW’s workplace savings proposition, with a current focus around online benefits delivery and employee engagement solutions for its wide range of corporate clients.
Julia has developed expertise over many years of the UK benefits market, specialising in workplace reward strategies and a flexible approach to benefits management and delivery. She also supports clients in how to educate and engage employees across the wealth and health benefit landscape.
She is involved in formulating workplace savings and benefit strategies and in particular how these are delivered and communicated to employees.
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