We recently chatted with Angela Williams, Chief People Officer at Crossrail and Chairman of CURO’s Board of Directors, about how to navigate employee reward in today’s environment and beyond. Angela has years of Global HR experience and has worked for companies including British Airways, Sodexo, and The Walt Disney Company.
We asked Angela if she could share advice with our network of HR and reward professionals on overcoming the current and future reward challenges that are developing - and will continue to develop - as a result of the current Coronavirus pandemic.
Read this blog for her advice on how to:
- Realign your reward strategies to reflect the new normal and employee expectations
- Retain top talent with limited financial budgets
- Adopt flexible reward programs and focus on the wellbeing of your employees
- Navigate through ‘the new normal’ in a leadership role
What is reward in the current environment?
It’s important to start with defining what we mean by “reward”. For some, reward will be keeping a job or returning from furlough. But for others - especially healthcare and other essential workers - it will be whether or not they will be rewarded or recognized for the work and sacrifice they have given and continue to give. Reward can mean so many different things to different people, and COVID-19 has brought this into sharper focus.
We are at the start of a recession and many are wondering how long the recession will last and how long the negative impacts to both businesses and employees will go on. Others are thriving during this time and have been provided a significant opportunity for business growth as the world goes digital. For both businesses that have been impacted negatively and for those that are thriving, it's equally important to ensure the reward agenda is aligned and driving the appropriate behaviours and needs for each organization. This has always been a priority and will continue to be the top priority for reward professionals and business leaders.
As we gradually emerge from the COVID-19 pandemic, it is clear that there will continue to be a fall or stagnation in pay awards and compensation packages in general. The focus for employers should be to move towards a more holistic approach to reward. This means restoring, where possible, the base pay reductions that were seen at the start of the pandemic to ensure the economy can move from an L curve (where there is no recovery in sight), closer to a V or more likely a U curve (where we will potentially stay at the base of the curve for longer, but recovery can then pick up more quickly) as confidence returns.
What will happen to employee expectations post-Coronavirus?
Employee expectations will evolve as we emerge from the crisis. What employers need to be careful of is the current nervous talent - who are hanging on to a role for now - leaving for more attractive reward packages with other employers who have managed through the crisis. Employees will be looking at companies that are able to realign their businesses and are ready to take advantage of the new markets and opportunities that will arise. These are the businesses that will attract the top talent - not only for the financial reward this will bring to them, but also the future career development that new opportunities and growth provide.
In understanding new expectations, employers will also need to identify how they re-integrate furloughed colleagues who have seen a new life outside. Some will have seen extreme hardship. Others will have learned new skills and gained new experiences, and will expect more and different from their employer. Leadership is key to ensuring the “new normal” accommodates these aspirations and learnings but at the same time, ensuring the business is as resilient as it can be, focusing on growth - not just survival.
Reward and recognition is at the heart of the problem and the solution. Most employers will not be able to afford to provide salary increases or incentives, including bonuses for some time to come. The question is: Can they afford not to for key talent?
Realigning your reward strategies and adopting more flexible practices
Employees will expect a flexible working environment that focuses on their health and wellbeing - physical, mental, and emotional. They will also expect an inclusive environment from leadership that is both open and transparent - and a reward package that reflects this.
Where some employers are saying that if people “choose” to work from home they should receive less pay, others are focused on rewarding productivity and output versus time spent. This change from “presenteeism” to “outcome focused and agile” and how to reward for this, is the challenge reward professionals are now facing. To provide flexible compensation and reward packages, as well as looking more broadly at what other options outside of pure pay (e.g. development, flexibility, health and wellbeing) can address the gaps where financial increases in pay are simply unaffordable, is now at the heart of the reward professional’s role.
In line with the Charter “Rewards after the pandemic” that has recently been published in the UK, led by Duncan Brown and a cross sector group of reward professionals and advisers, we need to consider the approach we should apply to future reward strategies. These include the reward principles, goals and success criteria to be applied, and how current reward policies should change to ensure they are fit for the new needs of the organizations within which they operate.
It is also important to make sure that any learnings from what’s worked and what hasn’t worked during the pandemic aren’t lost. This is the opportunity to take a blank sheet of paper and say “what do we really need to drive performance and how should this be rewarded going forward?”.
Listening to a diverse range of colleagues, as well as the executive team, will be important. Priorities have changed for many and sustaining this through appropriate and innovative reward solutions is paramount. We have a huge opportunity as leaders and reward professionals to take a new look at how best to drive the engagement and performance we need, and to align our reward programs with this.
We must start with the “health” of the organization and ask questions such as:
- How do we make it safe and healthy for employees to come to work?
- What is the purpose of the work employees are doing for the success of the organization going forward?
- What are the skills and talents we need, and how do we set goals that enable employees to be truly focused on what genuinely makes a difference?
There is no longer time or money available for bureaucracy and wasted work – we must reward for delivery and engagement on the purpose of the organization, for the benefit of customers and colleagues. Providing a share in this success for everyone is vital based on their contribution and performance. Now is the time to focus on what really matters.
Improve focus on diversity, inclusion and pay equity
Diversity and inclusion will play a key part in this. We must educate ourselves as leaders on the benefits of a diverse and inclusive environment and create this for our teams - and then reward fairly and appropriately. We have a huge opportunity to address the inequalities of the past and provide opportunities for everyone to bring their best, with the openness to say this may not be with the hours and approaches that were in place before. Pay equity is key – and not just equal pay for equal work, but fair and equitable pay for outputs, deliveries and performance. Not only about “what” is done but also “how” it is done by balancing skills, culture, values behaviours, and what will enable everyone to bring their best to work wherever they are based (e.g. at home or at a specific place of work).
This is not about being a “nice” or “soft” employer. This is about identifying what the organization is trying to achieve, its purpose, and working out the best way to deliver this purpose in a way that drives pride. Everyone should feel valued for the contribution they make. Passengers on this journey that don’t deliver should not be rewarded or tolerated, and should no longer see employment as a “right”. However, those who thrive and contribute, whether existing employees or new and emerging talent, should be valued and free to contribute to this success - and rewarded appropriately.
We also need to ensure that pay and reward is commensurate with value – the majority of low paid workers prior to the pandemic were seen as unskilled and under-valued – the pandemic has shown their value in keeping countries moving, in some cases genuinely saving lives, and keeping the supply and food chains moving. This must not be forgotten. We have an obligation as leaders and reward professionals to ensure fairness and respect is ingrained in our reward systems moving forward.
Retaining key talent beyond the crisis
There’s no doubt the coming months and years will be challenging. How do we ensure this fairness and equity of reward is actually economically viable and supportable, given many businesses are in survival mode and may be for some time to come?
The war for talent is now going to be even more acute. How do employers hold on to outstanding talent who will almost certainly have taken pay cuts or changes to their working time? In some cases, pay will have gone down while working time has gone up further. Some of these employees will be the first to move to a new employer if they feel they will be valued elsewhere.
We also need to ensure that we don’t create a lost generation of young talent, either graduates or apprentices, who feel their opportunity to gain experience and join the workforce has been diminished by the pandemic. We have a moral obligation to this generation. They are the future. And as Sir Tom Moore so eloquently said, “we will come through this pandemic and the sun will shine again tomorrow”.
The future of the world is our young people being encouraged and developed to build skills that will not only support the older population but also ensure we can rebuild strong economies and growth for the future. As reward professionals and employers, we have an obligation to build for the future as well as balance how we retain and reward our current best people.
New economy businesses, many of whom are wholly digital, will have the opportunity to attract and develop the best talent and reward them appropriately. We must encourage and support this while also ensuring that future talent are learning the skills required to be successful in the new economy.
We must also support the current workforce to learn these new skills and pivot their careers where they can achieve more sustainable employment. How many people had never used Zoom or MS Teams before the pandemic but it’s now a key part of their lives? This is what we need to embrace as the new normal – there are options out there now or soon, that will enable us to connect, learn, and grow. We must reward people either directly or indirectly for their openness to embrace new ways of working. We need to pivot our reward and recognition provision to be open to these new or emerging opportunities and ways of working.
As leaders, we must balance our immediate needs for survival while ensuring we are building the future. We will need talent in the future and we must provide opportunities to engage with those who want to learn and contribute. All parents want the best for their children and as leaders we must find a way to provide this opportunity even if it is in a different way from the past.
Navigating through the new world of reward in a leadership role
Navigating through uncertainty will be the “new normal” for leadership. How we reward performance and contribution in an ever-changing world will also need to become the norm. Change is inevitable and flexibility of approaches across all areas of the employment proposition will be required and without delay.
Risk is with us always, and no more so than now and for the coming years. In leadership positions, we must become risk managers, mitigators, and reward colleagues who are able to innovate and deliver through uncertainty. We must support and influence the required leadership thinking.
Executive pay will inevitably come under scrutiny, but we should approach this in the same way as for other colleagues. Executives need to make the big decisions and when they make the right decisions, they should be rewarded. When the decisions are not right or driven with the wrong intent, then they must live with the consequences.
In some ways the discussions need to move from “what” executives are paid to whether this is fair and equitable for the contribution they have made, and the leadership they have shown. Ensuring the right measures are in place that genuinely drive business success is at the heart of the discussion. Reward programs aligned to delivery, risk mitigation, effective leadership, and growth of the organization, to meet the needs of customers and ensure the business is sustainable for all who are employed directly or indirectly, should be the key drivers.
Reward practitioners and remuneration committees also have a huge challenge ahead. However, this means that when managed well, organizations will be more fit and able to deliver and grow in the longer term. Now is the time for reward professionals to step up and be innovative, embrace technology, and ensure alignment with their organizations’ purpose, values and commercial/financial drivers; ensure diversity and inclusion or thought, opportunity and approach. They need to also ensure flexibility, performance, and outcome focus is at the heart of design and decision making.
Final piece of advice for reward professionals
My one key suggestion for all reward professionals is to be open-minded, think differently, and ensure you challenge the leadership thinking. Make sure that there is alignment with the objectives of the organization, the real performance achieved, and that everyone who works in your organization feels that the system is fair and transparent.
Most people expect leaders to be rewarded at a different level than other employees, but the approach taken must be fair and explainable. Be bold and design reward and recognition to be relevant, modern and appropriate now and as we emerge from the pandemic. We need to ensure all organizations are fit and agile for the future - retaining, motivating, and developing high-performing talent while ensuring opportunity for reward in different ways for all. A challenge but a huge opportunity.