How the Pandemic Has Affected Reward Planning

Summary:

How did businesses change their reward strategies during the pandemic?

Are businesses switching reward strategies as we come out of the pandemic?

How reward strategies benefit businesses

How can businesses ensure they’re supporting their employees?

 


How the Pandemic Has Affected Reward Planning

There are few areas of the working world that Covid-19 hasn’t affected.

From hastening the trend towards hybrid and remote working, through to encouraging more people than ever to consider their career options, the pandemic continues to pose a number of challenges for businesses—and nowhere is this more true than with reward planning.

In this blog post we’re going to look at how the pandemic has affected the way organisations reward their employees, and why your reward strategy is going to be essential in maintaining an engaged and productive workforce as we emerge from the other side.

How did businesses change their reward strategies during the pandemic?

The early stages of Covid-19 were incredibly tough on businesses and workers alike.

With the national lockdown requiring all but non-essential retail to close and for people to remain at home, demand for a huge number of products and services collapsed.

The worst-hit companies took advantage of the furlough scheme, and as their business dried up they had to hit the pause button on all operations.

However, for those that continued to operate with a remote workforce, the impact on employee wellbeing had to be addressed immediately.

Even though most organisations had to cut costs in response to Covid-19, a majority (68%) also added or increased at least one reward to support their employees.

As early as May 2020, 42% of organisations were planning to make changes to their benefits programme because of the pandemic. The benefit priorities of employers for the rest of 2020 changed too, including:

  • Better communication on existing employee benefits
  • Improving mental health support, including stress management
  • Increased support for financial wellbeing
  • Addressing benefits for employees on leave and furlough

Organisations were also starting to recognise the urgency to address reward planning for staff retention, with data emerging later in 2020 that hinted at the coming ‘Great Resignation’. A Canada Life study published in September 2020 found that more than a quarter (27%) of employees who worked from home during that time were considering their career options as a result of how their employer dealt with lockdown.

 

Are businesses switching reward strategies as we come out of the pandemic?

On 21st February 2022, UK Prime Minister Boris Johnson announced that all Covid-19 restrictions would be brought to an end by the 1st April 2022. For now at least, it appears the UK is moving into a post-Covid world.

With this in mind, will businesses reverse the changes they made to their benefits and reward strategies over the last two years?

In the short-to-medium term, this looks unlikely.

Almost all (93%) of the organisations surveyed as a part of Aon’s Benefits and Trends Survey 2022 reported that employee expectations of the workplace have changed since pre-pandemic. According to the companies surveyed, the top three benefits employees now expect are:

  1. More flexible working hours (95%)
  2. Agile/home working (94%)
  3. Better awareness and handling of mental wellbeing (82%)

What’s more, 81% of survey respondents believe their reward strategy will need to change to meet the needs of future generations, while the vast majority had already implemented, or were planning to implement, benefits to support environmental, social, governance issues (93%) and diversity, equity and inclusion (95%).

It’s clear that organisations from all sectors understand the importance of robust employee benefit and reward planning to ensure engagement, acquisition and retention.

 

How reward strategies benefit businesses

By implementing a reward strategy that’s designed around your employees, your organisation will see a wide range of positive effects.

1. Increased productivity

We don’t perform at our best when we’re stressed or unhappy.

Research has shown that happy employees are as much as 13% more productive, while stress, depression and anxiety are the biggest drivers of work-related ill health.

2. Attract and retain the best talent

As the Aon study above shows, employees are expecting more from their employers post-pandemic.

Your reward planning is going to be a key element of your acquisition and retention strategy moving forward—at least if you want a team made up of people who will work hard to grow the organisation.

Think about it: a base salary only encourages an employee to work at the minimum required level, not go above and beyond. While a limited reward strategy might be fine for hiring people who are satisfied with that, your best staff will go somewhere where their hard work and achievements are recognised and rewarded.

With more organisations offering remote working the competition for top talent has increased, and a reward strategy strengthens your overall Employee Value Proposition (EVP).

3. Promote teamwork, collaboration and creativity

Rewards can be great at motivating individuals, but your reward strategy should also consider how to recognise teams. Get this right and you’ll encourage each employee within the team to excel, but ensure they’re motivated to collaborate too.

When your employees’ wellbeing is supported they’ll also be more innovative. When we’re happy and engaged, we’re also more alert and creative.

A culture of support and wellbeing will drive creativity, but your reward strategy can also include measures to directly recognise innovation and new ideas to encourage it further.

 

How can businesses ensure they’re supporting their employees?

Your reward strategy should take a holistic approach to employee wellbeing, and ensure you’re considering their physical, mental and financial health when reward planning.

1. Physical wellbeing

Physical health, combined with mental health, is responsible for 93% of the indirect effects on productivity, so it’s clear that this is something your organisation needs to care about and include in a reward strategy—but how can you encourage this through rewards and employee benefits?

Cycle-to-work schemes

Offering a positive impact on both physical and financial wellbeing, cycle to work schemes are a great way of promoting a healthy lifestyle while helping employees save on the cost of a commute and up to 42% in tax and National Insurance contributions (NICs)

They also help to reduce your company’s carbon footprint and can save you up to 13.8% on National Insurance payments.

Discounted gym membership

If the cost of joining a gym is a barrier to some of your employees doing more to stay healthy, offering discounted gym memberships will be a great feature of your reward strategy.

The gym membership benefit offered by Sodexo Engage’s employee benefits platform can provide up to 25% off annual gym memberships at leading brands.

2. Mental wellbeing

The pandemic has placed a huge strain on the mental health of people all over the world. As previously discussed, this has also impacted what employees expect from their employers when it comes to mental wellbeing support.

An Employee Assistance Programme (EAP) shows your staff that you care about their mental wellbeing by connecting them with support when they need it most.

For example, our EAP provides access to counsellors that are members of, and accredited to, the British Association for Counselling and Psychotherapy (BACP), either via phone or face-to-face.

3. Financial wellbeing

Many families suffered financially as the result of Covid-19, while job and income insecurity put strain on mental wellbeing.

By supporting your employees’ financial wellbeing, whether through employee benefits or financial rewards, you can help to reduce the stress that money troubles can cause, and directly improve their economic situation.

Recognition Prepaid Cards

A recognition prepaid card makes it easy to reward success and hard work, while giving the recipient the freedom to spend the money where they want, either online or in-store.

The prepaid cards we can supply can even be topped up, meaning you can reward your highest performing staff again and again—without having to order stacks of new cards every month.

Salary sacrifice schemes

Salary sacrifice schemes make it more affordable for your employees to purchase both everyday essentials and luxury items by contributing funds directly from their salary. This avoids having to take out expensive credit, while employers can make substantial savings on National Insurance contributions.

Salary sacrifice schemes can include annual leave purchase, season tickets for travel or even new cars.

Employee discounts

An Employee Discounts Programme can be an effective method of providing incentives and rewards, as well as a general employee benefit.

Gift cards, eVouchers and employee cashback cards all help your employees’ wages go further, while they can be used on everything from the weekly shop to the latest tech and family holidays.

Sodexo Engage have been helping organisations for over six decades to reward their employees, boost engagement and supercharge productivity.

Our fantastic selection of benefits and recognition products are used by some of the UK’s leading brands, so what are you waiting for? 

Get in touch with our expert team to find out how we can help formulate your reward strategy. We work collaboratively to identify the ideal solution for your specific organisational goals, ensuring optimal return on investment across a number of key business metrics.