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REMUNERATION NOW – SWEETEN THE POT – Issue 227 – September 2023 | Article of the Week

There’s a new crisis when it comes to attracting, motivating and keeping talent. The old ways of pay grades and increments – along with the icing on the salary cake of tailored benefits – no longer have the same traction or impact they used to, not least due to this crisis of economics, motivation and meaning, which impacts almost every workplace and grinds the gears of employees on all levels, especially younger cohorts.

There’s a new crisis when it comes to attracting, motivating and keeping talent. The old ways of pay grades and increments – along with the icing on the salary cake of tailored benefits – no longer have the same traction or impact they used to, not least due to this crisis of economics, motivation and meaning, which impacts almost every workplace and grinds the gears of employees on all levels, especially younger cohorts.

Disrupted by pandemic, mired in student debt, unable to get on the housing ladder and facing career instability, it is hardly the stuff of dreams for young people starting out. Given many businesses practice – either formally or informally – various forms of employment precarity, such as, reduced employee benefits and pensions being a prime example – it is hardly surprising that this translates into less loyalty and career commitment, especially when you consider the current challenging life context. When employee mood music and standard benefits fail to resonate, let alone motivate, it’s time to think outside the traditional remuneration box. The hybrid model alone can’t solve it, but finding the right balance is the foundation upon which to work. However, understanding a problem is, of course, not the same as taking steps to solve it. Organisations have great opportunities if they realise that younger cohorts are more interested in and motivated by “doing the right thing”, behaving ethically, working for ethical companies and generally, making a difference. Often these behaviours and attitudes used to be viewed as either private matters or community issues discrete from business life. But with work/life boundaries eroding, they are now interwoven and businesses will be expected to reflect and reciprocate.

Value-creation, when viewed in this manner, is just as much a matter of social capital as financial capital. One type of value can no longer be grown without the other over any time horizon of any decent duration, without successful interplay between these previously separate domains. Even though terms like corporate social responsibility (CSR) or Environmental, Social and Corporate Responsibility (ESG) might seem too formal and have also been worn smooth with over, ineffectual or empty usage, they’re vitally important concepts when it comes to contemporary talent recruitment across any sector or industry. Not least because they affect how successful a business can be in the future, in terms of how employees, potential candidates and customers perceive businesses and their deeds. But lest we forget the standard pieces of the puzzle – paying people competitively, employee experience, clear career progression and now four-day working week, plus the autonomy and freedom now expected – still all have a serious part to play. But the problem is, when most employers are all doing the same, there’s no differentiation to be seen here folks. In the “vibe economy” that younger cohorts occupy, there are elements that only a few organisations comprehend, although these factors can help businesses solve their recruitment and retention problems, if approached creatively. They just need to take advantage of their current situation and the existing trends that are informing the leading curve in, amongst other things, CSR and ESG.

While it is not a legal requirement for companies to undertake CSR activities, there are other rules in place that mean companies are expected to report on a range of social, environmental and ethical issues. Under the Companies Act 2006, one of the duties of all directors is to keep CSR issues featured in the boardroom. Interestingly, this has opened the door to a greater support of voluntary activities and though the idea of corporate volunteering has its naysayers – and a chequered recent political history – I believe corporately supported community activities and ‘giving back’ has much to recommend it as a strategic way to entice, attract and retain young talent. Indeed, many businesses and organisations already have extensive programmes in place, but now is the time to place more resources and commitment into what is called employer-supported volunteering (ESV), where employees of an organisation are given paid time off to volunteer during working hours, as a source of competitive advantage. The benefits of ESV are numerous and almost incontestable. Even before the pandemic, over half (57 percent) of UK employees said they wanted their employers to do more for CSR, while 63 percent said paid time off during working hours for charitable initiatives, would significantly improve their engagement. Additionally, 51 percent believe their company has a duty to commit to charitable acts and CSR. Taking a step back towards the consumer market, 88 percent of consumers are more likely to buy from a business that visibly acts to improve society. Importantly, research shows that companies with a fully engaged workforce outperform their peers by 147 percent in earnings per share. If, for example, ESV meant that the productivity of the UK workforce went up by just one percent, analysis suggests the economy would benefit by approximately £17 billion. It is well known that engaged employees are also more likely to perform better, take three and a half fewer sick days a year and also stick around longer than their disengaged colleagues.

Voluntarily making positive impacts upon your community or environment is central to engagement and nowadays floats many boats. So forward-thinking employers that encourage and enable such activities would be kicking an open door for younger more engaged people. Since being allowed to volunteer is central to engagement, this means there are few progressive employers that would dismiss out-of-hand a request to volunteer especially if there were staff retention and competitive advantage involved. Indeed, in pre-pandemic days, already 17 percent of the population went out of their way to ‘put something back’ every year. If you were to put a monetary value on the total number of hours volunteered, back then it would be £22 billion, according to the ONS. Post-pandemic and with testing economic conditions forecast for an unknown duration, possibly years ahead, it seems safe to say that these numbers, volunteers and the value of the time spent, will have the chance to increase many times over.

Nobody should be afraid to step up and request the support of their employers in their goal to support their communities, particularly at a time of very clear need. Sadly though, at this moment, there is clear evidence that this is not being talked about enough. While ESV participation is growing and around ten percent of volunteers do so via these programmes, not enough people are taking advantage of the opportunity. Some reports show that even where businesses are giving employees the green light to volunteer, many people are ignoring the offer. Some reports show that where employees have a scheme available, just a quarter to a third participate at least once a year. We need to start that conversation and make sure that more people are not just allowed to volunteer but are actively encouraged to do so. Plus, on the flipside to this, individuals should not be reluctant to press employers for their support. There are no doubts that it is to everyone’s advantage. The simple message is, if businesses focus on their employees’ wellbeing and happiness, they will do better and society will be better off too. Happiness is derived from a sense of ownership and control and feeling positive about the environment in which you work. Employees are in a stronger position than ever when it comes to asking their workplace for support in their ethical life choices and businesses enabling voluntary activities is a key part of that equation. It would be sensible for employers to ride this ‘giving back’ wave and offer or seriously enhance existing their own workplace corporate volunteering opportunities. ESV is adaptable – one size doesn’t fit all – and it boosts productivity at the individual level, not least as it is tailored to their own beliefs and interests, but also improves productivity at the collective level in terms of engagement as well as over time, recruitment and retention.

FOR FURTHER INFO THEINDEPENDENTDIRECTOR.CO.UK

Gerry Brown is the author of Making a Difference: Leadership, Change & Giving Back the Independent Director Way (published by De Gruyter) and The Independent Director (published by Palgrave Macmillan)

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