Pay and employee benefits go hand-in-hand to form an overall employee reward package. Pay awards have been maintained in many areas but are under pressure in others due to the current economic climate. Meanwhile, many firms are focussing on employee benefits.
In our recent survey of pay decisions and furlough arrangements we found that just over half of organisations who had already made a decision on their 2020 pay award will honour the agreed increase for workers. Of the remainder, 27% have deferred their pay award until later this year while 22% have decided to freeze pay. These pay decisions are largely being shaped by the difficult economic circumstances in which many companies currently find themselves, and improvements to benefits are also being used by some firms as a way of continuing to recruit, retain and motivate staff.
A number of companies are introducing benefits targeted at assisting families. Goldman Sachs has offered an extra 10 days of family leave globally to all staff to handle the “unique personal circumstances related to the profound impact of Covid-19”. This could be to assist an elderly relative or help with childcare needs. Similarly, Google has extended its “carer leave” package from 4 to 14 weeks to support working parents dealing with school and care facility closures. The company has also put more emphasis on flexible working. Microsoft has offered extended leave to all its 150,000 employees who are working parents to support them during the pandemic.
Some organisations are offering additional benefits, for example at Newcastle University. Workers there have been given Fridays off work with full pay to “provide certainty and stability during the pandemic”. The University is moving to a new remote teaching model and the additional benefit is hoped to boost goodwill and commitment of staff.
Some companies, that have been badly affected by the coronavirus, have already made changes to reduce pay costs, by implementing temporary pay cuts or by reducing staff hours. Other ways of reducing pay costs include the example at law firm Shearman and Sterling, which is offering all of its employees a sabbatical during the pandemic of between three and six months on 30% pay.
When deciding on the packages provided for employees it has always been important to consider the effects on productivity, job satisfaction and employee welfare. There are many advantages to employers offering benefits packages in addition to pay. They can help with the retention of staff when the benefits offered are valued by the employees. They can help reduce overall costs, particularly where there are tax or regulatory advantages. They may also help employees be more efficient in their roles. These advantages are particularly important during the pandemic.
IDR has produced a guide to help understand many of the different benefits available enabling employers to think about the addition of benefits within a pay structure. Our Benefits Handbook focusses on a wide variety of benefits, from maternity and paternity pay to holiday allowances and family-friendly benefits.
The Benefits Handbook is based on research by IDR covering a range of employee benefits offered by organisations across different sectors, conducted between November 2018 and January 2019. It includes information from 169 companies, together employing a combined workforce of more than 1.4 million.