Retention troubles put benefits ahead of pay

A third of UK organisations now have a separate reward function as employers attempt to recruit, retain and motivate staff in a competitive labour market, according to new research.

However, many employers may not be benefiting fully from their focus on reward, because the message is not reaching employees.

The Chartered Institute of Personnel and Development’s (CIPD) annual reward survey shows that 60 per cent of organisations expect line managers to communicate their reward schemes, but less than a third actually involve them in developing the strategy.

Charles Cotton, CIPD reward adviser, said: “Organisations must think about how they communicate these benefit programmes to staff and ensure that the different elements of total reward, including non-financial, are integrated.”

He said that for employers to realise a full return on investment, staff must fully understand and appreciate the rewards they are offered.

Employers are also increasingly promoting non-financial benefits in the reward packages, such as family-friendly work policies. In both the voluntary and public sectors, managing pay costs is a key consideration that has led organisations to take this route.

“Many employers are recognising that non-financial rewards are just as important as wages and bonuses,” said Cotton.

There is an improved awareness surrounding low pay compared with last year’s survey. However, 47 per cent of organisations have no intention of carrying out an equal pay review in the near future.

Cotton said the Government should do more to encourage employers to conduct equal pay reviews.

“The [Government] needs to work with employers to change mindsets and ensure they recognise the business benefits of paying employees equitably,” said Cotton.

The CIPD Annual Reward Conference takes place tomorrow at Olympia in London.

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