To a CIPD reward forum this week on the topic of “Rewarding in a Recession”. The scene was set by John Philpott of the CIPD with a number of highly depressing going-downhill graphs followed by general advice on how to get value for your non-pay benefits from Mark Eaton of Personal Group. Chris Johnson of Mercer then gave an all-round view of what is happening in larger companies. I will post some more detailed comments at another date but here are four key points that I brought away with me.
- With at least half of the private sector planning to freeze pay (or worse) are the public sector going to be able to face-down the clamour for them to follow suit? Already this is becoming an issue and treasury pay guidance and benchmarking reports seem to be lost in the long grass. Could we even see a summer of discontent and a who-runs-the-country, Ted Heath style, election this Autumn?
- Much discussion about the importance of hanging onto good staff in order to react when the upturn comes. Focussed benefits, sabbaticals and good communications were seen to be important here. Bonuses are a dirty word at present but, provided they are proportionate and targeted at key performance elements, they can provide a way to ensure make sure you reward the right people but not until you have got the money in first.
- Among all the talk about how to retain the talent there was the warning that first you have to get through to the upturn. This always requires a sophisticated understanding about where employment costs actually lie but a new factor is speed. New HR and manning strategies are being developed and implemented in days or weeks rather than the lengthier approach many HR teams are accustomed to. Basically, if you do not already have the data at your HR finger tips you will be out of the loop when the big decisions are made.
- Not only are most private sector businesses planning to delay or cancel pay reviews, few really know what to expect after 2010 (when, hopefully, things will have picked up). We may well find a very different reward environment after that – a new normal? More focus on personalised benefits and flexibilities, better targeted pay and a clearer understanding, by both managers and the managed, of what actually contributes to organisation success.
