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Our spring 2021 UK Reward Management Survey has identified the key challenges that employers are currently facing, alongside capturing pay trends, bonus levels and turnover expectations. We collected data between March and May 2021 from 278 HR Professionals and Reward Practitioners – representing HR practices that affect over half a million employees.

As 81 per cent continue to work remotely in light of “Freedom Day” being delayed until 19 July, we examine the measures respondent employers are taking that will shape the future of work.

1. Improved business outlook

Chancellor Rishi Sunak’s March budget was focused on economic recovery and the concept of ‘building back better’. Similarly, our spring 2021 survey captures the first signs of optimism about the labour market becoming increasingly buoyant over the next six months. There is a marked improvement in the expectations of revenue increases from 31 per cent in autumn 2019 amidst Brexit uncertainty, falling to its lowest at 15 per cent this time last year and rising to 47 per cent in spring 2021.

Fewer employers are operating a pay freeze, reducing from 24 per cent in autumn 2020 to 11 per cent in spring 2021. In 2020, we captured the lowest levels of recruitment and retention difficulties that employers had experienced since the 2008 recession. However, our spring 2021 survey captures the first signs of optimism about the labour market echoing the predicted improved trading conditions and employee turnover becoming increasingly buoyant over the next six months.

2. New ways of working

Employers are continuing to engage employees in new ways of working. 80 per cent are actively listening to how they are finding the rollout of remote working or how they feel if they have to go into the workplace, through the use of employee surveys and consultation. 89 per cent have adopted strategies to specifically bolster employee wellbeing. Around half of respondent employers have used working groups and parties to actively canvas employee opinions and concerns.


Download the key findings from the UK Reward Management Survey Spring 2021.

Download UK Reward Management Survey Spring 2021 - Key Findings(pdf)

The measures that respondents are offering to protect employees include 67 per cent making the return to the office voluntary and 66 per cent operating a booking system to limit capacity in the office. The majority of respondents predict that between 20 and 60 per cent of employees’ hours will be carried out in the workplace by the end of 2021, demonstrating the staged return of employees. Only one in five anticipate a return to the office for between 91 and 100 per cent of employees by the end of 2021.

3. The long-term impact of the pandemic

The revised date for “Freedom Day” of 19 July and the removal of all outstanding restrictions is being carefully planned by employers who continue to follow government guidance and encourage working from home. However, the extent to which employees are being asked to return to the office varies widely. Many respondent employers are taking an employee-led approach.

84 per cent anticipate that flexibility will be more readily available and only four per cent of respondents plan to return to old ways of working. As the need for a larger office space reduces, this has led 36 per cent to consider reducing the office space they currently hold. Many employers outline how office spaces are set to become more collaborative experiences for collective team gatherings. Whilst all employers are considering their physical workspaces and how these will be balanced with the virtual world many occupy, ‘hybrid working’ will look different in every organisation.

4. Pay and bonus levels remain conservative

Even though 54 per cent have managed to avoid making redundancies in spite of the turbulence experienced during the pandemic, the average pay award now lies below inflation, at two per cent. There was a temporary uplift in awards to three per cent in spring 2020, which was mainly due to the fact that 56 per cent of respondents had already carried out their pay review and more generous awards had gone ahead just before the first lockdown.

Even though 54 per cent have managed to avoid making redundancies in spite of the turbulence experienced during the pandemic, the average pay award now lies below inflation, at two per cent.

For the 11 per cent facing a pay freeze, this may be the second consecutive year of constrained pay. Combined with rising living costs, employers recognise their role in delivering value through reward schemes and support employees given the extraordinary circumstances they have worked through. Out of cycle pay awards continue to skew the ‘official’ pay figures given by organisations. One third anticipate that they will award out of cycle pay increases that will account for up to one per cent of their annual pay bill, many using them to bridge the gap between constrained pay and economic pressures.

Respondent employers report that the number of employees receiving a bonus and the size of bonuses will remain consistent. 75 per cent of employers operate bonus schemes, which is consistent with 76 per cent of employers reporting this in autumn 2020. Half of respondent employers predict that the number of employees receiving payments will stay the same. One in three predict the size of bonuses will stay the same in 2021.

5. A top C-Suite agenda item: diversity, equality and inclusion

The government suspended gender pay gap reporting for 2019/20 given the fast-changing pressures companies faced during the COVID-19 crisis. However, this was importantly reinstated for 2021 in light of the disproportionate impact of the pandemic on women’s progress; the deadline has been extended to October. 61 per cent of respondents measured the gap in 2020, despite not being required to report it, which demonstrates the weight and analysis companies dedicate to this governance requirement and holding themselves to account. 43 per cent are conducting further analysis of their figures, which is up from 39 per cent in spring 2020.

Organisations are increasingly examining their wider record on equality. 85 per cent of respondents have diversity and inclusion initiatives in place. The majority also have plans to analyse their employee demographic data in greater detail. 78 per cent have or plan to examine their ethnicity pay gap data; 57 per cent have or intend to investigate employee data based on age; and 60 per cent have or will analyse how they support disabled employees. Other respondents reported investigating other aspects of their employees’ lives to understand their employee diversity, from sexuality to socio-economic analysis and whether they are championing social mobility.

Want to know more?

We want to say thank you to all those who participated in the survey – the comprehensive anonymised report has been circulated to all respondents. If we can help shape your approach to any of the pressing HR agenda items identified in our spring survey, get in touch with us. Register now to contribute your views in our autumn 2021 survey.

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