Hardworking, happy employees are what will see every organization through tough times during the COVID-19 crisis. Coronavirus isn’t forever but how HR teams handle reward and recognition now will leave a lasting impression on their workforces. Organizations putting people first during a time of disruption and uncertainty will keep their support in the future - and this means taking an agile and inventive approach to managing reward. We virtually sat down with a panel of reward experts to talk about the actions and adjustments that they’re putting in place for their own reward programs to maintain a sense of direction, motivate their employees, and celebrate wins - big and small. We’ve summarized their insights in a two-part blog series, this is part one.
Meet the rewards panel
John Grover, Chief People Officer and Co-Founder at Endsight (as well as a CURO client) is based in California. John co-founded Endsight and is responsible for talent acquisition, employee engagement, performance, and traditional HR responsibilities such as benefits and payroll.
Evan Davidge, The Wellbeing Leader, is based in the UK. Evan is an experienced workplace wellbeing practitioner and leader with his own advisory practice. Evan offers strategic advice, as well as practitioner training and resources focused on total reward and workplace wellbeing. In the past, Evan was a CURO client when he led reward at Arup Ove.
Angela Williams, Chief People Officer for Crossrail and Chairman at CURO, is also based in the UK. Angela has extensive experience in partnering with CEOs and Boards, global change and transformation, as well as leadership and membership of remuneration, audit and nominations committees.
How have you had to adapt your reward practices as a result of the challenges of COVID-19?
Organizations of all sizes have been focused on putting their people first - in income preservation, wellbeing, and health. At the same time, firms are protecting cash flow because the reality is labor costs are a significant balance sheet item. We’ve seen pay practices including: furloughs, pay freezes, pay decreases, relief funds bonuses being put on hold or suspended, and sales commissions paused or reworked. At the same time, we’ve also seen teams open up conversations about compensation to expand transparency and trust. Now, adapting reward practices is all about survival.
For SMEs and non-for-profits, cash flow is usually on the tighter side without a worldwide pandemic and now they have Coronavirus that is disproportionately impacting their business. EAPs (employee assistance programs) are becoming more and more important. Then, we have industries such as technology and software that have seen a high uptick in demand for their services so firms in this space have been providing their workforce exceptional payments, spot bonuses, and the like.
Poll #1: What is at the top of your rewards to-do list right now?
At 71%, the majority of our audience said focusing on employee wellbeing is at the top of their to-do list. Following at 40%, respondents said refocusing incentive plans in line with new business metrics and targeted outcomes. 23% said controlling compensation costs through base pay adjustments. And 18% said addressing wage inequity.
What do you see as immediate reward challenges as we move into the recovery phase? What’s at the top of your to-do list now?
There is still a lot of nerves, uncertainty, and anxiety around working out “what’s next” for employers and their workforce so this involves a multi scenario planning approach. On top of that, the world’s perception on reward is moving and changing all the time. There’s the compensation component but there’s also the retention of talent component - building resilience and adaptability into reward programs is key. Many organizations are keeping options open and up in the air in regards to salary and bonuses to see how the recovery trends play out, particularly with concerns of a second COVID-19 wave in certain locations. Others are still in the grips of their first wave.
Keeping this in mind, reward programs need to be fair and explainable. There needs to be a clear, structured strategy while ensuring personalization in packages. For example, some employees may have to go into the office or a work site, risking health and safety at this time. Because of that, they should be rewarded.
Challenges at the top of the reward to-do list include:
- Current talent. How do we retain existing employees? How do we keep them motivated? Is flexible work part of the package? If so, how do we keep teams engaged?
- Future talent. How do we create an attractive package to get people to join our team and leave their current job? How do we make integration into a remote environment easier? How do we manage work and performance?
- Rising talent, including graduates and interns. How do we integrate and train them to be successful? How do we ensure furloughed talent isn’t falling behind and are staying competitive?
Are there any areas of reward that you think will be more important in the new working environment we may find ourselves in?
An interesting observation is that so many of the tactics we put in place were those needed to accelerate us into the future of work. In this period that we associate with the term “lockdown”, we’ve actually propelled forward at an exponential rate. Businesses are considering a more digital approach to work, more flexible resource bases, skills acquisition and skills-based working in a highly collaborative manner. It looks like teams are moving towards less of a “bonus culture”, more of a flexible, “wellbeing culture” that needs to align with the purpose of the organization. Clear drivers of the business and the rewards programs structure needs to align with changing priorities. Adapting rewards to these challenges will be interesting.
Poll #2: Looking forward, what do you think your biggest talent retention and engagement challenges will be?
At 63%, the majority of our audience said the biggest talent retention and engagement challenge will be ensuring reward is linked to outcomes that will drive the success of the organization going forward. Following at 57%, respondents said retaining talent (with potentially limited resources). 22% said enhancing pay transparency. And 18% said managing pay differentials between high and low income earners.
How do you think talent retention and engagement will impact reward strategy after the pandemic?
Tweaking your management mindset
The money tree may be withering at the moment. As much as organizations would love to be rewarding their workforce financially, it may not happen right this moment. Managing employees remotely requires a different leadership and management mindset which includes a skill set of engaging and motivating teams from a distance, while assisting them in professional growth and development.
Offering non-monetary incentives, including flexibility for wellbeing
Some employees may take the view that having a job and wage is enough, but how long will that view last? Expectations about work has shifted with many willingly accepting pay cuts while valuing broader total reward provision around health and wellbeing at this time. Right now, non-monetary incentives need to be at the heart of a rewards strategy.
Some companies are doing this by offering increased flexibility of taking a couple hours a day to go for a run or do yoga. To do something that benefits yourself since employees aren’t commuting to offices in that timeframe now - instead, they are working. But while considering this, HR teams need to be aware that different demographics have different needs and must make sure they tailor, or personalize, their reward programs accordingly.
Listening to your workforce
Listening to your employees to find out what they value is critical to understanding the ROI of each component in your rewards package – rather than a blanket approach. What do your employees value most relative to cost? Which gives you the biggest ROI?
A combination of play and performance
While it’s uncertain how long we will all be working in unusual conditions, there are things we can do now to set our people up for success and peace of mind today and into the future. Our initial focus should be ensuring employees’ essential needs are met, allowing for open and honest communication around compensation, and reminding our workforce that the positive impact they make to our organizations will develop stronger foundations on which we can rebuild or strengthen rewards programs and overall business processes. Managing employee reward is a combination of play, purpose, potential and performance now and beyond the COVID-19 pandemic.