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The lifting of restrictions is in sight, with a clear roadmap taking us into the summer. No one could have predicted how the last year has unfolded. As we emerge from Lockdown 3.0, we ask businesses about their outlook for the next 12 months - there is still time to contribute your views and experience.

Have your say on the top themes emerging from our spring UK Reward Management Survey:

We track topical insights such as the return to the workplace, alongside business activity, employment challenges, base pay, benefits and HR agendas. In return for 10-15 minutes of your time, you will receive a free analysis of the results. Here we capture the emerging themes from respondent employers so far.

1. Business optimism

Business optimism as we emerge from Lockdown 3.0 is markedly higher. Nearly half of businesses expect their order books to increase, with 41 per cent anticipating that their profitability will increase. With increased business activity on the horizon as the economy opens up again following the latest restrictions and as a result of the successful vaccination programme across the UK, businesses are heading into the summer on the most certain footing they have experienced in over a year.

This is also backed up by the lowest levels of turnover we have captured since 2008; 75 per cent of respondents report that they are not having to offer recruits salaries which conflict with those paid to existing employees. This was a key recruitment tool pre-pandemic but with a less buoyant labour market, paying a premium is currently unnecessary for the majority of employers.

2. Cautious picture on pay

There is a real range in the levels of predicted pay increases. In our autumn 2020 survey, we captured that 24 per cent were operating a pay freeze and 16 per cent forecast this to continue into 2021. Therefore, the range may reflect that some have already implemented a freeze and feel like they can’t have two consecutive years of pay freezes. Meanwhile, 56 per cent of respondents went ahead with their pay review as usual last year and may look to implement a freeze on pay this year instead.

One third predict an across the board increase, with one fifth anticipating individually determined increases. One quarter think they’ll use a combination of across the board and individual pay increases. Interestingly, 60 per cent of organisations’ pay decisions will be driven by external relativities, ensuring they are benchmarking to remain competitive. This seems at odds with the previous point about how it seems that it is currently an employers’ market. However, whilst people value security from their jobs, employers are alive to the fact that they still need to pay comparatively in the market to retain key talent.

3. Bonus outlook

Three quarters of respondents report operating a bonus scheme. Half of respondents predict that the number receiving bonuses will stay the same. One third think that the size of bonuses will stay the same, however one third say that it’s too early to tell. Respondents are detailing the various ways in which the pandemic has altered their bonus strategy. 25 per cent have lowered targets year on year, whilst 35 per cent report using discretionary bonuses instead of pay rises.

Bonuses will likely operate differently depending on sector. Often bonuses are discretionary and dependent on the financial health of the business over the year. The spectre of redundancies this year will mean that adjustments to bonuses will be inevitable in some industries. Specialist employment law may need to be sought if a reduced or non-payment of bonus is alleged to be made on discriminatory grounds. Bonus decisions across an organisation always need to be made carefully.

4. Pay Gap Reporting

Half have calculated their gender pay gap and intend to publish it, whilst 23 per cent do not need to calculate their data as they have less than 250 employees. This is encouraging as it demonstrates employer’s awareness of their responsibility to drive forwards a positive story to tell when it comes to their role in closing the gender pay gap. 41 per cent will publish their gender pay gap data by the April deadline and a further 25 per cent will publish by the extended deadline of October. 48 per cent will conduct further analysis into the drivers behind their figures to ensure they are taking concrete steps year on year.

There is also an increase in the number of employers looking at their wider equality, diversity and inclusion record when it comes to the demographic analysis of their workforce. Organisations are increasingly measuring the pay differences between groups of employees. 49 per cent have started to look at their ethnicity pay gap; 32 per cent scrutinising any pay gaps based on age; and 29 per cent analysing their pay data based on disability. We’ll explore the range of initiatives that organisations are implementing to further their diversity and inclusion agendas in the final results.

5. The return to the office

In our autumn 2020 UK reward Management Survey, our results showed that by August 2021, more than 40 per cent expect to have all staff back in the office. However, 86 per cent are still predominantly working from home and the timescales have been pushed back to the end of the year – but even then, only one in five anticipate a full-time return. Most people anticipate that there will be flexibility built in – with around two to three days being spent in the office. This is backed up by the BBC who surveyed 50 of the UK’s biggest employers who predominantly said that they do not plan to bring back staff to the office full time.

Employers are flagging the challenges posed by the idea of a fully remote workforce. Many point to the fact that they had established teams of employees that relied on existing office cultures when working remotely. The Chief Executive of Washington Media Cathy Merrill says her team’s “established practices, unspoken rules and shared values established over years” informed their remote working arrangements. Similarly, concerns are raised when it comes to trainees and the impact on the learning experience for more junior employees. Whilst employees have been able to request flexible working for years, 85 per cent of respondents so far expect that flexible working arrangements will be more readily available because of the pandemic. Refusing requests if productivity has been maintained may be objectively harder. It will be up to employers to define the level of flexibility they are happy to offer.

Have your say

Take 15 minutes to contribute your views and in return, receive a free comprehensive report of the survey findings. Subject to participation levels in your sector, we will also send you a tailored report, reflecting our sector findings.

Commitment to confidentiality

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

  1. Never share confidential information with anyone else.
  2. Only produce an aggregated summary report of the results making it impossible to identify individual answers.

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