COMPLIANCE
How can employers ensure they provide financial support to all staff? David Yewdall, partner, Evelyn Partners, discusses how employer support mechanisms have evolved over time, with the focus now on ensuring organisations provide sufficient financial support to their staff
W e’ve seen a great change in the last decade regarding the importance of employee values and the decisions involved when choosing a potential employer to work for. As generations have evolved and over time, more employees have become conscious of the importance of working for a ‘good’ and sustainable employer which they feel proud to be representing. Unless organisations are receptive to these trends, they’ll struggle to retain, motivate and inspire talent in supporting their organisational growth and development of the workforce. Gen Z, which refers to individuals born between the 1990s and 2010s, are the largest and most diverse group in employment history, given their technological and social media influenced upbringing. Gen Z are therefore a group heavily motivated and energised by employers representing their personal principles and values, which now matters more than ever. How does this transpire in practice? Traditionally, an organisation’s reward strategy is used to define remuneration packages, which typically includes benchmarked salary levels and a cash bonus scheme linked to performance. It may even extend to understanding that several employees wish to feel further
success as their employer becomes more successful, and this can therefore lead to share option schemes being rolled out or equity ownership being offered as an extension of remuneration. Health and well-being trends Beyond this, however, employers may choose to become more competitive with their packages to employees, including responding to societal or economic trends. This particularly affects benefits, and we are, even now, seeing some employers introduce packages which cover fertility support, for example. From a more general well-being perspective, we certainly saw the initial health-related trend develop with a focus on employees’ physical health and the introduction of private medical insurance schemes and annual health assessments. A few years ago, we also saw the rise in focus on mental health, resulting in employee support helplines and easy to access counselling services through a healthcare provider enlisted by employers. This attention was, of course, further accelerated in priority following the Covid-19 pandemic and the increased awareness and duty of care from organisations in supporting employee mental health. This was prompted by the rise in work-related stress and side effects from the uncertainty, anxiety and isolation
many were exposed to. Since this point, we’ve seen the rise of a more difficult economic climate for both individuals and businesses to operate in, certainly following the restrictions and economic suffering from the pandemic. A rise in inflation, interest rates and the cost of living more generally has led to increased financial stress across society, with employee net pay now not going as far as it once did. It’s certainly been a tough few years. From an employer’s perspective, in particular those businesses affected and still recovering from the pandemic, it may not be so easy to provide sufficient salary increases and bonuses to acknowledge this hardship or to match inflation. Several employers have chosen to adapt their policies surrounding this issue to try and help, perhaps by enabling remote working to cut down on employee travel costs, or by introducing supermarket voucher schemes or hardship loans for exceptional cases of difficulty. However, even these tactics may not be suitable for every business and may affect only a small population where it’s feasible. Even where it can be offered to all employees, employers need to also be aware of the hidden costs which can arise, such as the tax and National Insurance (NI) implications of extending employee remuneration.
| Professional in Payroll, Pensions and Reward | June 2023 | Issue 91 26
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