Here are the following five key emerging trends:
1. Businesses at different stages of planning amidst ongoing Brexit uncertainty
Only half of respondents so far have a plan in place to accommodate Brexit. Whilst 16 per cent do not currently have a plan, 13 per cent are actively developing a plan. When asked about Brexit’s anticipated impact on budgets, the answers are evenly balanced, with the most significant impact being around budgets set to address skills and labour shortages. One-third of respondents report that this will increase, whilst 35 per cent say that it is too early to tell. This suggests that ‘business as usual’ budgets, dedicated to pay review funding, HR/reward projects and the employment of graduates and apprentices, will remain steady but those designed to tackle recruitment and retention may increase. Our survey will explore the anticipated impact on business projections for the year ahead.
2. Recruitment challenges persist for employers
68 per cent of respondents so far have experienced difficulty in recruiting people in 2019, whilst 63 per cent anticipate problems over the next 12 months. The picture of retention is more finely balanced, with around half having experienced difficulty in retaining people over the last 12 months and 42 per cent having no issues, whilst just over half anticipate retention problems, but 17 per cent feel that it is too early to tell. Recruitment and retention is a key priority for HR teams, with two thirds offering new recruits salaries that conflict with those paid to existing employees. These challenges are being further exacerbated by the skills and talent shortage. We will explore the full picture in our autumn edition.
3. Conservative pay reviews continue, potentially bolstered by out of cycle pay reviews
The most common pay budget for 2019 looks set to maintain the three per cent increase that was captured in our spring 2019 survey. Our survey explores the key drivers behind this, which potentially includes targeting high performing people, external relativities and core roles. We also continue to scrutinise the picture of pay reviews throughout the year. The rise of out of cycle pay increases is a trend that we have recently started to track, with 90 per cent of respondents so far citing market pressures as a key driver for those awarded in 2019. Customers have increasingly flagged their use of out of cycle pay increases that goes beyond adjustments to reflect individual promotions. Faced with constrained wage growth budgets struggling to match inflation, employers are increasingly using these to address the associated recruitment and retention challenges. Out of cycle pay reviews vary from none being granted to as high as six per cent. Our survey will explore the reasons behind these additional wage increases that skew the true picture of wage growth.
4. Employers take a creative approach to benefits
The majority of respondents so far have said that they have reviewed benefits in the last year, signalling its increasingly important role in recruitment and retention. We explore the control over benefits that companies have, with one fifth having scope to change enhanced annual leave, maternity leave and paternity leave packages and occupational sick pay. A focus on employee wellbeing and promoting work-life commitments through generous annual leave, maternity and paternity packages are increasingly valued by employees. Other traditional benefits seem to be more set in stone. Whilst pension schemes and life assurance are the most popular, volunteering and ‘Give as you earn’ schemes are increasingly popular, with around one fifth offering these schemes. Their importance goes beyond financial, reflecting the values of employees.
5. HR agendas tackle mental health and employee wellbeing
Employers are fulfilling the responsibility that they have in promoting mental health and wellbeing in the workplace, with 86 per cent already having dedicated policies and procedures in place. Offering an Employee Assistance Programme and flexible working are the most two most popular support mechanisms employers have put in place. Workplace stigma and perceptions are the dominant challenges reported so far in managing mental health and wellbeing in respondents’ workplaces.
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To find out more about the key HR and reward challenges facing organisations over the next 12 months, how they are responding to Brexit and the likely shape of 2020 HR budgets, please click here. The whole survey should take 10-15 minutes to complete and you will receive a free report of the results when they are published. Subject to participation, there will also be additional sector analysis reports that compare your industry activity against the general market.
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