Engaging employees is always a challenge, never more so than during a recession. HR services firm Ceridian and benefits and reward services provider Vebnet recently produced a report on the subject. They brought together a group of HR and reward specialists to discuss the issues it raises, including how to manage employee expectations post-recession. Tara Craig reports.
- Chairman: Michael Jenkins, chief executive at management school Roffey Park
- Darren Paris, executive director of HR at the Association of Chartered Certified Accountants (ACCA)
- Mary Canavan, HR director, British Library
- Jennifer Stacey, chief people officer, Ceridian
- Vanessa Robinson, head of HR practice development, Chartered Institute of Personnel and Development (CIPD)
- Ian Morley, associate director, reward at commercial property agent DTZ
- Toby Simons, head of international HR and reward at built asset consultancy EC Harris
- Alastair Procter, HR director, Europe, Middle East and Africa at marketing group Mediabrands
- Jim Carson, head of reward at private health company, Spire Healthcare
- Sue Davies, head of HR operations at St Dunstan’s, a charity that provides support for blind and visually impaired ex-service men and women
- Sarah Bissell, head of reward at housing association The Hyde Group
- Richard Morgan, director of consultancy services, Vebnet
Michael Jenkins: We’ve heard talk of a ‘w-shaped‘ recession. Will some sectors come out of the recession early, or will it be a phased recovery?
Richard Morgan: We’re seeing from clients that there are all sorts of different-shaped recessions. For us, it’s been a ‘lower-case v‘, and we’re certainly seeing signs of quite a rapid pick-up in business.
Mary Canavan: The impact for us is about to come, as we’re awaiting the pre-Budget statement later this month. We’ve all heard the various pledges that the political parties have made at their conferences, and there isn’t very much positive news there for the public sector. At the British Library we’ve put in place a raft of benefits, but I’m in no doubt we’ve got a lot of challenges ahead, and I think that’s pretty consistent across the public sector, be it the health service or local government.
Jennifer Stacey: It isn’t a ‘one-size-fits-all recession – and as and when we move out of it, it will be gradual, rather than a big bang.
Michael Jenkins: According to the Ceridian/Vebnet report, employee plans for the upturn focus on enhanced rewards in three key areas:
1. Pay: one in five plan to ask immediately for a pay rise
2. Promotion: one in five will be looking for a new role or opportunity, either internally or with another company
3. Personal development: 16% will be looking for new training or development of skills.
How will you deal with requests for pay rises?
Sarah Bissell: We are at a very early stage of thinking about next year and budgets, but the key thing is to make pay part of a wider transformation – we are already partway through overhauling our pay and grading structure. This means that if people are asking us for a pay rise just because we’ve come out of recession, we will have benchmarking and market data to use when making a decision.
Toby Simons: We’ve had a lot of discussions around what we call an automatic reward culture, where people expect a pay rise and a bonus every year. We are striving to move towards a performance-driven process.
Alastair Procter: It’s vital to have a robust performance management system. We did a survey which found that a lot of people were disappointed with their salaries, but when we got under the surface, it turned out that half the people involved thought they were 10 times better than they actually were. So looking at salary in isolation doesn’t do it.
Richard Morgan: We’re starting to see signs of some organisations linking benefits back to performance as well, particularly if they have managed to unbundle a benefits allowance from the provision of certain benefits. So they can say: “you get X amount of money or X percentage of salary”, which has two effects: it brings everything within the performance culture, and it helps to control future benefits inflation.
Jim Carson: We will look at increasing the total package, not just pay. We can’t go back to the market offering high salaries – that would be irresponsible, certainly in the early years of recovery.
Michael Jenkins: Is employee desire for promotion post-recession easily dealt with?
Alastair Procter: I think the figures for us will be much higher, with at least two or three in five keen for promotion, due to the demographics of people we have working in our organisation. This has been a problem for us for years, regardless of the recession. We simply don’t have as many opportunities as some people think they deserve. But there’s still an element of equating promotion with time served, which is the biggest evil of all. I know for a fact that we could be better at communicating what it takes to move up the ladder.
Sue Davis: We have that age-old problem of people overvaluing their own talents and contribution, which makes it even harder. It’s hard to motivate people while telling them: “You’re not being promoted – you’re just not good enough.”
Jennifer Stacey: We are seeing a lot more roles being consolidated – that gives people a new dimension to their role, which can be revitalising, without the pay increases that they might have liked to see. But they are being invested in and developed.
Toby Simons: We are looking at the more technical expertise element of promotion, rather than the traditional hierarchical view that people take. As part of that, we are starting to work up our internship and secondment programme. That way, people are developing new skillsets, rather than being in that ‘dead men’s shoes’ scenario, waiting to move up another level.
Ian Morley: If you look at the BPs of this world, which tend to employ people on a cradle-to-grave basis, an underpinning element of their HR strategy has been to move people around the organisation. So they keep that talent while keeping people engaged. Many organisations make a point of rotating graduates, but don’t necessarily rotate staff at other levels.
Michael Jenkins: Will the personal development of employees form part of your strategy post-recession, both in terms of managing talent and keeping people engaged?
Jim Carson: There will be fewer opportunities post-recession, because of de-layering of organisations. Hopefully people will see that and understand that although they have the skills, there are no jobs. I think it will be more about growth – your own personal development.
Alastair Procter: I agree. Possibly it depends on the sector, and the demographics of the workforce. We employ a disproportionately large number of Generation Ys, so something like personal development is huge. In some respects that’s good news. It compensates for the reward side, where we know we’re going to be limited for some time, and probably always will be to an extent, because of the nature of our business. So it will continue to be fundamentally important to us.
Toby Simons: It’s also about people taking ownership of their development. Rather than the employer saying: “You need to do this”, and: “This is how we develop you”, it’s about people coming back to the employer and saying: “Well, this is how we wish to be developed, and these are the sorts of things that we want to be doing”. Personal development is an exceptionally subjective area – what may be right for one person is not necessarily going to be right for the next. It’s very difficult to capture, particularly when you’re working with different generations.
Michael Jenkins: Why don’t people understand their benefits?
Jim Carson: Organisations don’t communicate well. The legislation around pensions is particularly difficult.
Toby Simons: You can’t force people to read everything you give them. It’s a case of deciding how much further you’re prepared to go to engage with people.
Sarah Bissell: People expect a catch when it comes to benefits, so we’ve started producing case studies about benefits, rather than just talking about them.
Michael Jenkins: What have you learnt from the recession?
Vanessa Robinson: It’s now about seeing the employee as a customer.
Sarah Bissell: It’s about wider engagement, and understanding that reward doesn’t sit in isolation. Managing expectations is also important.
Jennifer Stacey: In HR, we’ve been very fortunate in having panoramic views of our businesses, but the recession has taught us that we need to be more collaborative and communicative.
Ian Morley: We’ve learnt that the focus is not on cash, and that we need to manage people’s expectations. And we have to accept that some people will move on when the recovery comes.
Alastair Procter: It’s a case of engaging people for the post-recession world. The strategy part is relatively easy – it’s the execution that’s difficult.