Over the last three weeks we have all had to adjust massively (for most) to this new way of virtual working. There was a huge LinkedIn hype in week one and this week it’s starting to feel like people are settling into their new indoor lifestyles and everyone is getting marginally better at using Skype, Zoom, Microsoft Teams, FaceTime etc…albeit with the majority of calls also involving kids, dogs or parents.
I’ve been in regular contact with my reward network and what isn’t so clear is what their roles will entail over the coming year and how we manage the after effects of Covid-19 in terms of pay and benefits. We’ve been impressed by some of the innovative ideas that businesses have come up with (mainly to support mental & physical wellbeing). A number of ideas are quick fixes and focus on senior business members taking salary reductions, delays in bonus payments, reduced hours or furloughing workers but now is the time to think about the longer-term implications of these quick decisions.
Reward professionals will face the daunting task of marrying cost cutting with keeping good talent, and ensuring the business is ready to rebound when the market comes back. How do you bonus pool when markets are all over the place? The highest performers will be your greatest cost, how do you manage or curtail this?
They will also be required to think about “performance vs cost” across the business. Crudely it can be a question of Who stays and who goes? Who can we carry on without? Whose performance doesn’t match their salary? How can we manage performance for the coming year?
A number of organisations have publicly committed to keeping all staff members in seat through this period (Morgan Stanley and Visa to name a couple) but how do we achieve and make the most of those individuals if their roles might not be as essential during this time? As a reward professional, you will be very much involved in these conversations, particularly when the business needs data to back up their decision making.
Dormancy in the markets will push back annual cycles and so it is likely year end this year could be a right challenge, start preparing and thinking about what that may involve and consider you may be short of resource as businesses temporarily cut back.
Use of third parties may be limited. Where are you going to get market data from if you don’t have the budget to buy it? Now more than ever is a time to use your network and former colleagues for free advice and guidance.
Your share price has probably taking a hammering, putting many LTIP’s under water. Don’t ignore it and COMMUNICATE with your employees. Many firms have just paid bonuses and many of these will be chunks of RSU’s that employees will look at and grimace. Put a story around it and educate them that this is short term and will end. They will still hold value and are not worthless in every circumstance.
Think creatively around cost problems, and encourage longer term thinking as mentioned previously. Businesses often become cost monsters in these times. Everything becomes about short term rather than long term. This is a great chance to identify opportunities for employees and retain and engage staff. Could you encourage your leadership team to consider temporary reduced wages? Could you offer your workforce the chance to work 4 days per week to save revenue?
Keeping people employed in these times is the best possible engagement tool!
You will be encouraged to reduce spend where possible around employee perks. Instead of scrapping various initiatives to save money, negotiate hard with your benefits vendors on renewals to save money. Don’t ruin your employment deal by taking away the little things. Scrapping things like long service awards, employee incentives, buying and selling holidays etc is thinking too short term.
It’s tempting in times of difficulty to think short term, to panic, to pull the shutters down but now is a great time for Reward to stand up and be counted. You have an important role in the company to tread the fine line between reducing spend, but also retaining and engaging talent. You don’t want your employees walking out the door as soon as the market comes back up so you need to help them through this. Communication is key, and helping your firm think more about protecting jobs rather than salary and bonus is your mission.
With the delay of IR35, suspension of the gender pay gap reporting requirements and various support schemes, the government and bodies are doing what they can to help organisations but how can you as a company stand out and support your employees?
I am keen to keep my ear to the ground and understand what individual organisations are doing in relation to the above. I am also happy to share reward market intel and make introductions to help boost your network during this period. We might not be able to organise a round table but we can arrange an excellent virtual discussion!
Please do reach out on firstname.lastname@example.org; myself and the Exec/ Reward team at Oakleaf are still working as hard as ever and here to help. Stay safe!!!