4. Reduces costs associated with recruitment and retention difficulties
As the pandemic created an employer’s market, a buoyant labour market is set to define 2022. With one third of UK employees considering getting a new job this year, 23 per cent say that a lack of pay rise is a driving force in that decision-making process. Employers are looking to implement pay awards that help with the rising cost of living as much as they can, to support staff; this, and reinforcing the sum of the total reward strategy for employees, can help to ease this period of financial uncertainty.
One of the main drivers of employee turnover is pay but it is crucial to consider the risks of losing them in a market where the competition for talent is high. Early indications of the pay award increases for 2022 from our UK Reward Management Survey, which is currently live, are around three per cent. Traditionally employees will expect their pay to rise by the rate of inflation, so as far as affordability allows, try to bear this in mind to avoid incurring costs of replacing employees. It is estimated that it costs around £30,614 to replace one employee. Therefore, continually keeping pay competitive drives down employee turnover and impacts the bottom line.
5. Keeps businesses agile
The pandemic has instigated fundamental shifts in ways of working. Businesses had to transform overnight and the most successful were able to thrive under unprecedented circumstances. A total reward strategy requires regular evaluation to ensure each part is working effectively. Measuring metrics such as time to fill each vacancy, applicants per vacancy and the quality of applications can monitor the success of external perceptions about their offers to employees. Continually seeking employee feedback through pulse surveys and creating concrete actions based on employee opinions is important to keep systems agile.
A total reward strategy that is grounded in research and continually evolves with regular evaluation is necessary to remain fit for purpose. The latest market data needs to be factored in to ensure that the approach remains competitive. Wider staff surveys can monitor the ongoing success of the reward package before it becomes too embedded, enabling you to address this as quickly as possible. With one third of workers experiencing unmanageable workloads according to a recent YouGov poll, reducing recruitment and retention pressures is crucial. 38 per cent reported that their workload is affecting their mental health – underlining the importance of having reward systems that foster, attract and retain strong, cohesive workforces that can remain agile.