Based on the UK Reward Management Survey* provides HR professionals with insights into current HR trends, here we outline highlights from the report and information on post-pandemic working arrangements.
HR trends and insights
Data was collected between September and October 2021 from 184 HR and Finance Directors and Reward and Compensation Specialists, representing HR practices that affect half a million employees.
Relatively flat wage growth persists
The most common pay award for 2021 continues to be evenly split between up to two and up to three per cent. 38 per cent are awarding two per cent increases and 32 per cent are awarding up to three per cent increases. However, 47 per cent expect that their pay review budget will reach up to three per cent in 2022, with 28 per cent of respondents predicting up to two per cent increases. The number of respondent employers predicting an increase of up to four per cent is the highest captured in recent years, going from three per cent this year to a projected 12 per cent in 2022.
The return to the workplace
Since the summer we have seen the impact of the strong rollout of the vaccination programme in the avoidance of further lockdowns. Companies are increasingly defining how they will continue to be agile but accommodate a return to the workplace. By the end of 2021, only one in three employers are expecting to have all employees return to the office. Even by August 2022, only half of the workforce is projected to be back in the office. To date, the expectation for employees to be in the office is around one to two days, which is predicted to increase to two to three days by August 2022.
A definitive policy
However, only 57 per cent have implemented a concrete ‘new way of working’ policy as a direct result of the pandemic. 15 per cent are still navigating what this will look like and have adopted a temporary policy as organisations define what works best for them and their people. Keeping everyone across the business updated and aligned to the firm-wide vision will be important in uniting organisations operating hybrid working. This will also guide and support the approach of line managers in how to best manage their teams and improve employee engagement.
A menu of benefits
We are also seeing an increasing number of employers review their benefits offering. With persisting levels of constrained pay, employers are looking to demonstrate how robust their rewards package is when looked at holistically. However, only one third of employers are offering flexible benefits to enable their people to tailor their own benefits and define the benefits from which they derive the most value.
The Coronavirus Job Retention Scheme
We also note the recovery of businesses and the role of the furlough scheme in saving jobs over the course of the pandemic. 22 per cent said that the government furlough scheme directly saved them from making any redundancies and 22 per cent credited the scheme with reducing the number of redundancies they needed to make, demonstrating the key role the scheme played in stemming job losses.
The impact of a buoyant labour market
Coinciding with greater levels of business confidence that respondents have reported over recent months, there has been a record number of vacancies. An increasingly buoyant labour market has led to a marked increase in the number of employers experiencing and predicting recruitment and retention challenges over the next six months, with employee turnover set to increase. Nearly two thirds expect retention issues to persist and three quarters of employers anticipate recruitment issues, signalling a busy market for recruiters as we head into 2022.