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Our spring 2022 UK Reward Management Survey is currently live. Our bi-annual survey is designed to monitor key trends in the world of HR and reward across a variety of sectors, keeping you updated on the latest intelligence on pay, bonuses and HR trends. The spring edition explores pay awards and the pressures of inflation, alongside diversity and inclusion initiatives being embedded by businesses.

There is still time to have your say on five key emerging trends:

1. Pay reviews will face the cost of living pressure

89 per cent expect that the pay review will take place at the usual time of year. Whilst the median pay budget expectation for 2022 sits at three per cent, in comparison to our autumn 2021 survey, more respondents are indicating that their pay reviews will be between three and four per cent. Upward pressure on pay is being driven by the cost of living crisis. 39 per cent are opting for an across the board increase, with only 14 per cent setting individually determined increases.

75 per cent are expecting pay actions to be driven by external relativities. 44 per cent are being driven by internal relativities, suggesting that fairness may lie at the heart of a lot of pay decisions as employers want to be objective in their decision making. Equally, 49 per cent are targeting high performing people to retain talent. Only 25 per cent were having to target scarce resources, perhaps reflecting the buoyancy of the labour market.

Bonus levels are set to remain steady. With 72 per cent operating a bonus scheme, 63 per cent think the number receiving a bonus will stay the same and 38 per cent expect the size of bonuses to stay the same. Another 37 per cent think it is too early to tell whether the size will increase given the uncertainty in the market.

Out of cycle pay increases continue to skew official pay figures. We have tracked their role in supplementing constrained pay for some time, with 94 per cent attributing their use to market pressures (an increase from 80 per cent in spring 2021) and 96 per cent attributing them to inflationary pressures (increasing from 32 per cent in spring 2021). We will outline the final figures and the impact on the reported pay awards in our survey report.

2. Wider diversity and inclusion statistics are being captured

78 per cent of respondents monitor the differences in gender pay. Succession planning was widely reported as a means of addressing imbalances in the make-up of senior leadership that can redress the balance in the long-term. 47 per cent are conducting further analysis into Gender Pay in their businesses. More people are also considering an Equal Pay Audit based on their results, to identify the drivers behind their figures and how they can tackle them.

38 per cent are monitoring their ethnicity figures; 18 per cent are monitoring age-related data; and 15 per cent are considering those who have a disability. Around one in five are planning to analyse the demographics of their workforce from an age perspective; with one third looking into ethnicity and one third also planning to consider the percentage of their workforce with a disability. We are also exploring the different initiatives that companies have in place which we will explore in detail in our survey report.

3. Benefits are being used to mitigate pay reviews

Around half of respondents review their benefits provision annually. One in five review this every other year to ensure that they are selecting the right packages and they are using this to remain competitive. 44 per cent offer flexible benefits and 19 per cent have improved their benefits provision to mitigate their pay review being constrained.

Many employers seem to be looking at benefits packages in order to attract and retain talent – ensuring that they are addressing physical, mental and financial wellbeing by offering innovative benefits. Hybrid working and greater options around leave arrangements are consistently being referenced by respondents as the benefits most valued by their employees. Equally, leave policies are being reviewed around a greater number of life events that there is more awareness around, such as the menopause, bereavement and carer responsibilities. Greater flexibility and the opportunity to bring one’s whole self to work with support from an employer is being facilitated by benefits packages.

4. Organisations continue to define ‘hybrid working’

The return to the office was a key topic in our spring survey in 2021, with most employers anticipating that employees would return two to three days a week by the end of last year. Hybrid working is a model that is still being worked out by many employers as they try to balance the requirements of clients with the requirements of their employees. For employees returning to the office, many have agreed this at team level, with few being resistant to return in some capacity. In our report, we will publish the breakdown of the average hours being spent in the office by respondent employers.

86 per cent either ‘strongly agree’ or ‘agree’ that hybrid working will become the norm in the workplace. Only around one in five have experienced difficulties with line managers effectively managing their remote team. We will explore the extent to which businesses are seeing employees return to the office, but early indications are that this varies widely. The report will also explore the impact that the return to the office has had on sick days being taken by employees.

5. The labour market is buoyant post-pandemic

In the next six months, a greater number of respondents expect difficulties in retaining people. 77 per cent expect challenges, compared to the 70 per cent of respondent employers having experienced difficulties over the last six months. In the last six months, 81 per cent report recruitment problems, whilst 86 per cent expect to have difficulties in the coming six months. This has led 69 per cent of respondents to offer new recruits salaries that conflict with those paid to existing employees, creating challenges with parity of pay internally in the organisation, raising questions of fairness. 55 per cent have had to offer 10 per cent more, with 43 per cent offering up to 20 per cent more.

Nearly half of respondents anticipate that there will be turnover across all employee levels, particularly at middle manager level. The top strategy employers said they are using to overcome recruitment and retention challenges is technology – for instance, LinkedIn as a recruitment tool. This was closely followed by 73 per cent who are monitoring the results of their exit interviews.

Have your say

Contribute now to receive your free report. We will send you full analysis of the key HR and reward challenges facing organisations over the next 12 months, keeping you updated on the key practices and insights in the world of HR. The whole survey should only take ten minutes to complete and subject to participation, there will be additional sector-specific analysis, helping you compare your industry activity against the general market.

Our commitment to confidentiality

We understand that some of the information we ask may be commercially sensitive. Therefore we:

  1. Will never share your confidential information with anyone else; and
  2. Will only produce an aggregated summary report making it impossible to identify individual answers.

If you have any queries, or trouble accessing the survey, please get in touch and we will be happy to help.

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