3. Optimistic business outlook and bonuses
Despite a cautious approach to pay, UK businesses remain optimistic about growth: nearly half of respondents so far expect order books to increase; anticipate higher business income and revenue; and project increased profitability.
Bonuses remain a staple of UK reward strategies. Two thirds of organisations operate a bonus scheme, with the majority maintaining the same number of recipients and bonus sizes as in previous years. Annual bonuses dominate, with 9/10 respondents opting for this frequency and performance criteria are typically a mix of individual, team and company performance, reflecting a more holistic approach to rewarding contribution.
Employee Benefits highlights how some organisations are factoring hybrid working into bonus considerations. 14 per cent of organisations link bonuses to office attendance, while 86 per cent have no formal policy connecting bonuses to in-person presence. In fact, 88 per cent of respondents report that hybrid working positively impacts employees’ ability to meet KPIs and achieve bonuses.
4. Hybrid working and flexibility
Flexible and hybrid working arrangements have firmly established themselves in the UK workforce:
- 91 per cent of organisations offer part-time options.
- 93 per cent allow remote working regularly or on an ad hoc basis.
- 68 per cent provide informal flexibility, such as ad hoc changes in hours or location.
- 56 per cent offer compressed hours.
- 12 per cent utilise less common approaches, like annualised hours.
Return-to-office mandates remain moderate. While most organisations expect attendance around two to three days a week, only three per cent are requiring full-time attendance; 43 per cent mandate part-time office presence and 36 per cent have no plans to mandate staff to be physically on-site. Tracking office attendance is limited, with two thirds of organisations not currently monitoring this metric.
Resistance to flexible working is generally low, with half experiencing no pushback and 44 per cent seeing only minor resistance. Hybrid working is increasingly acknowledged as beneficial for productivity, employee engagement and retention, reinforcing its permanence in reward and workforce strategy.
We discussed this topic in depth during a panel session moderated by Tim Kellett at our recent Pay and Reward Conference, featuring Amy Tullis, People Director of Europe at Laing O’Rourke, and Olivia Hill, People Director at AAT. The debate around mandating a return to the workplace continues to evolve and our panellists shared candid insights into how their organisations are navigating this shift. AAT introduced regular in-office days to promote connection while Laing O’Rourke asked employees to be in the office five days a week. Both highlighted how inconsistent attendance and differing team expectations can create challenges for collaboration and fairness.
The discussion highlighted the importance of managing change sensitively, addressing barriers such as travel, childcare and workplace facilities, and recognising that flexibility needs often differ across the workforce. Both leaders emphasised that there is no one-size-fits-all solution; success depends on consistency, strong managerial communication and understanding the differing needs of teams and individuals.
5. Pay transparency and equity
Pay transparency continues to gain traction, driven in part by the EU Pay Transparency Directive. Around a quarter of organisations are fully transparent, publishing pay scales internally; a third are looking to be more transparent, despite only operating in the UK, as they believe the UK will adopt similar legislation.
Common measures to improve transparency include:
- Developing pay structures or scales (84 per cent).
- Implementing formal job grading (79 per cent).
- Conducting and publishing gender pay gap reports (74 per cent).
- Regular pay audits (54 per cent).
- Providing employees with information on how pay is determined (53 per cent).
Challenges remain, primarily around affordability (70 per cent) and historic pay inconsistencies (58 per cent), with resistance to change and insufficient data also posing barriers.
