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How has the Covid-19 pandemic affected global reward strategies?

Tuesday November 17, 2020

Need to know: 

  • The Covid-19 pandemic has affected the reward packages that employers offer to their global workforces.
  • The need for health and wellbeing packages has never been more important than during uncertain times.
  • Global organisations are looking to refine the way they offer benefits, to present a much more unified and flexible package for all.

The Covid-19 (Coronavirus) pandemic has led to many organisations worldwide adopting new approaches to reward; dealing with financial ramifications and all the while supporting the health and wellbeing of their employees during uncertain times. 

Willis Towers Watson’s 2020 Covid-19 Benefits Survey, published in May 2020, revealed that 42% of organisations plan to make changes to their benefits programmes because of the Coronavirus pandemic. Employers may be forced to completely overhaul their reward strategies to meet the expectations of their employees.

There is a further urgency for organisations to address how they support their employees; a Canada Life study, published in September 2020, found that 27% of employees are reconsidering their career options due to how their organisation has dealt with the pandemic.

Enhancing global reward strategies 

With most employees still working from home, organisations have been encouraged to address their health and wellbeing strategies. Rebekah Tapping, group HR director at Personal Group, says: “In recent times, employers have tweaked their benefits to support the wellbeing of staff; organisations must be encouraged to continually improve reward schemes. This will ensure they have a motivated workforce ready to perform well in the uncertain months that lie ahead.”

Support levels for employees may differ from country to country, which could cause issues around engagement and job satisfaction. Tapping notes how important it is to offer the same level of support to every global team when looking to amend global reward strategies.

Health will continue to be a key area for employers as the pandemic continues to impact ways of working. Mark Ramsook, senior director, health and benefits, Great Britain and Western Europe at Willis Towers Watson, says: “Increasingly, more organisations in the UK and Europe are looking to improve their benefits around health and absenteeism. Staff working globally may struggle to feel engaged with their place of work due to current circumstances. Remote working is something that may become a norm in the coming years, so employers have to understand these new expectations and adapt.” 

Employers are now looking to benefits providers to enhance global reward strategies, Ramsook believes, he continues: “Reward providers have a key role to play in offering a wide benefits package that suits the increasing demand for health and wellbeing support during this time. Organisations may also look to enquire how providers are able to create a reward strategy around the new working pattern for teams working globally.”

Caroline Walmsley, global head of HR at Axa Global Healthcare, believes that there has been a rise in group income protection to ensure that staff globally are being supported while working remotely. She adds: “Group income [protection] in America has seen an increasing demand due to the health risks of Coronavirus and the lack of health insurance that many staff have. Additionally, mental health support has risen, especially for teams working in the UK.”

The demand for this health and wellbeing support is apparent in organisations across the globe. Willis Towers Watson’s 2020 Covid-19 Great Britain and Western Europe Survey, published in April 2020, that looked at organisations operating in the UK, China, North America, Latin America Middle East, and other locations in Europe and Asia, found that 86% of employers have put in measures to ensure that people feel supported during this time.

Walmsley believes that the locations that have seen a surge in demand for health and wellbeing support need a flexible support system to ensure that organisations are consistently adapting exceptionally to the sharp shifts of change. She says: “The rise in demand for these benefits have changed expectations, and therefore provides a need for flexibility and having a tailored experience to ensure that these reward strategies meet employees’ needs.”

Emotional and financial support

The value of employee assistance programmes (EAPs) and financial support has been noted across UK and European organisations. Ramsook believes that for employers that are looking to support the wellbeing of their global employees during uncertain times, EAPs are an effective solution. He says: “EAPs are intended to help employees deal with personal problems that might adversely impact their work performance, health and wellbeing. Organisations can work in partnership with a third-party EAP provider to offer these services and look after the workforce, both inside and outside of work.” 

An additional way to support wellbeing can be to offer mindfulness and meditation apps to employees. Apps such as Headspace and Modern Health can be easily rolled out to all global teams.

Ken Charman, chief executive at UFlexreward, believes that this has been the wake-up call that employers have needed to support and reward their employees and offers them the opportunity to reassess. He says: “The relationship between work and financial recognition has changed, and employees are looking to benefit providers to offer a different type of reward strategy, especially if they are working from home and not commuting anymore. Employers need to mix it up at the very least. Offering innovative solutions to support the overall wellbeing of a workforce will be extremely beneficial in the long run.”

With many employers facing tight budgets and financial uncertainty, pay incentives may not be an option. Therefore, organisations are looking to benefits providers, to create learning tools, career progression opportunities and creating engagement programmes, says Ramsook.

Pay equalisation across different countries is already an aspect that has been introduced for organisations, regardless of where employees work in the world. This is mainly due to employers adopting a remote-working policy, meaning that location has less of an influence on how they work. Ramsook says: “Location for global teams is proving to have less of an impact due to new working measures set and enforced worldwide by the pandemic.

“Employees that now work remotely have full flexibility to live and work where they want. This consequently means that organisations may equalise pay for all teams despite what location they are based in.”

There will, of course, be different pay limitations due to national minimum wage laws, depending on location. Pay equalisation may be a key aspect to the future of work, says Tamsin Sridhara, senior director at Willis Towers Watson. “Many organisations have considered introducing pay equalisation. Employers no longer need to find talent based on location because most roles are now being completed at home,” she says. “Employers may not implement pay equalisation immediately to support the financial wellbeing of staff during the current climate, but this is an aspect of pay strategy that may be introduced in the coming years following on from the pandemic.”

Communication and collaboration 

Collaboration and communication between employees must be addressed when looking to adjust global reward strategies during the pandemic. Walmsley believes that employers could benefit from recommunicating the current incentives that are offered. She says: “We are now seeing a much wider range of reward incentives being offered by global organisations. It has become more of a trend to have a holistic offering.

“There is a disconnect between what employers are making available to global teams and what benefits employees actually think they have access to. It is one thing having a plethora of benefits for staff to choose from, but it is equally important to ensure the employees will use this and know how to access them.” Walmsley believes that now, more than ever, the delivery of these reward packages through the virtual world is imperative. 

Regional reward differences

In the past, employers may have offered different reward strategies to teams depending on location. Charman feels that this can often disperse organisational culture and introduce unconscious bias. He says: “In the past few years, reward strategies have been tied to hierarchies and demographics; these are becoming less important due to the technology that employers now have at their disposal. Global organisations are more likely to invest in a flexible benefits provider to ensure that regardless of location, employees are receiving the best benefits that are most relevant to them.

“It is important for employers to understand what is needed in certain countries, and share that knowledge with local teams and providers to create an effective benefits strategy that is tweaked depending on location.”

The pandemic has forced millions of employees to make a shift in working style. Supporting a global workforce through reward strategies has never been more important to ensure that collaboration across countries remain strong. Organisations that have adjusted and adapted will continue to reap the benefits of having an engaged global workforce during times of uncertainty.

Article published in Employee Benefits on 17th November 2020

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