Most UK companies are wasting money by not having a documented reward strategy in place, according to a new research.
The annual Employee Rewards Watch study of 755 employers, by benefits provider Thomsons Online Benefits, revealed that less than one-third had a formal strategy. This meant HR departments were struggling to implement changes to their reward policies, with about half reporting difficulties in obtaining the budget. One-third claimed they lacked the ability to measure the success of new initiatives.
More than four out of 10 companies said they could not even report on their total reward costs. Employers are still struggling with staff perception of their benefits, with 36% claiming their reward strategy was not valued by employees or not well communicated to them.
Fears of employers decreasing their existing pensions contributions after the introduction of compulsory contributions in 2012 – so-called ‘levelling down’ – were not borne out by the survey as just 0.61% planned to take this action. The majority of employers (64%) said they would keep their contributions at the same level.
Michael Whitfield, chief executive of Thomsons Online Benefits, said: “Reward is one the largest costs in any business, and in the increasingly difficult economic climate, HR professionals can expect to be put under increasing pressure to demonstrate this spend is being properly directed.
“As well as ensuring that it has a properly documented strategy, HR must get a real handle on what it is spending and where, so it can evaluate which elements are working and where it could achieve more bang for its buck,” Whitfield added.