2. Cost of Living Support
The cost of living crisis led to a third of employers paying a lump sum to support employees in 2022, paying a median amount of £750. 15 per cent have already decided to pay a lump sum in 2023, while 14 per cent are considering doing so, with the median of £550 noted. With fewer employers set to offer a lump sum payment, and those that are offering a lower amount, this indicates hope that the crisis will start to abate over the next few months.
Employers’ top three priorities for the year ahead include pay benchmarking, employee opinion surveys and benefits benchmarking, all of which helps design an evidence-based total reward strategy that attracts and retains the right talent. Opinion surveys are an effective way of learning directly from employees about the true value that they derive from their reward package and helping employers target support.
3. Bonuses and Benefits
Nearly three quarters of respondent employers operate a bonus scheme. While 67 per cent expect the number of people receiving bonuses will stay the same, around half think the size of payments will stay the same.
The usual patterns emerge in the data that show senior roles attracting bigger bonuses, but business confidence to reward main board directors once again following the uncertainty of the pandemic has been scrutinised recently, with organisations coming under scrutiny for the level of bonuses available to directors. Actual or expected median bonuses for main board directors have reduced from 41-45 per cent in spring 2022 to 26-30 per cent in spring 2023. Companies may be factoring in the CEO pay reporting requirements as more look to carry out executive benchmarking.
One third of respondents offer a flexible benefits scheme and 17 per cent are considering offering this. The top three benefits are more traditional in nature, with 95 per cent offering pensions; 84 per cent providing an Employee Assistance Programme; and 79 per cent offering Life Assurance. Particularly in times of constrained pay, many employers take the opportunity to emphasise the combined value of their total reward package through Total Reward Statements which can outline what is available to individuals and their uptake.
The cost of living crisis may be shaping and influencing wider benefits packages. 72 per cent are offering promotions and discounts on high street services and products to reduce spending by employees, while 56 per cent have already said that they are directly allowing working from home to reduce travel costs in response to the cost of living crisis.