Reward and the Working Environment

To coincide with the launch of our 2021 North of England Salaries Report, Nigel Wright hosted a webinar focused on ‘Reward and the Working Environment.’ Over 100 leaders representing companies from across the North attended, which included a presentation of the results from our market survey on the impact of Covid-19 on Flexible Working, Wellbeing, Remuneration and Talent.

Carr’s Group HR Director, Gillian Dixon, the Director of People at Hays Travel, Becky Robson, and the Chief HR Officer at McBride, Jane Cronin, also revealed how their companies had responded to the challenges imposed by the pandemic.

How approaches to flexible working have changed since Covid-19

The trend towards hybrid working is significant, with 87% of northern companies that responded to our survey indicating how employees now spend some of their working week based at home, as well attending work premises. Before Covid-19, only 28% of northern firms utilised a hybrid working model. Working from home has become normal for staff who are ordinarily office-based. Our survey revealed how 1 in 3 businesses now offer employees the chance to work remotely 100% of the time. While this is surprisingly high, we still expect hybrid working, backed by efficient hybrid work monitoring systems to become the predominant mode of working for office-based staff in a post-pandemic world.

Of course, many people are unable to work at home because of the nature of their roles. Most manufacturers, for example, allow less than 1/4 of their staff to work from home, according to our survey. In many ways, these figures highlight how manufacturing businesses are disadvantaged by being unable to deploy flexibility and allow employees to work from home.

How Carr’s Group plc is addressing Flexible Working

Gillian Dixon, HR Director at Carr’s Group, an international agriculture and engineering manufacturer based in Cumbria, acknowledged that many of its divisions couldn’t have functioned without people onsite. And, by communicating extensively with employees throughout the pandemic and being open and honest about business requirements, there was never any feeling of animosity from those staff who were unable to work from home.

According to Gillian, Carr’s Group is primarily interested in facilitating high productivity by creating working environments that allow employees to perform at their best. Flexibility plays a key part in this strategy. One of the firm’s engineering divisions now operates a four-day week, and the business has embraced home-working to attract talent from outside of its core locations. Ten per cent of Carr’s global workforce is now completely home-based or doing a form of hybrid working, confirmed Gillian. And during the pandemic, the business has prioritised supporting individuals with family care requirements, implemented an employee engagement survey, and delivered virtual training for home-based workers to facilitate this change in working practices.

In some cases, Covid-19 was the “catalyst to make changes happen,” said Gillian, and “speed up processes that should have always been there.”  

Fundamentally, Gillian stated that she is averse to creating policy around flexible working, as to do so would “constrain the whole purpose of what it means to be flexible.” With so much pressure on firms to take action to address this trend, she reminded attendees that the definition of flexible is “bending easily without breaking” – implying that being responsive to the diverse needs of the organisation while maintaining business integrity, is the true ethos of a flexible approach.

Acknowledging diversity is a key factor here. “Everyone is different and reacts differently to workplace situations”, says Gillian, and the only way to truly understand context is by “getting personal and making deeper connections with people.” Gillian shared her own experience of working flexibly during a year of challenging personal circumstances. Her need for “normality, structure and purpose” was met by Carr’s, who allowed Gillian to continue in her role during this difficult time:

“I cannot begin to tell you how important the flexibility offered to me contributed to my physical and mental wellbeing. A policy can never capture this. It can only be achieved through personal connections.”

Employees needing mental health support during the pandemic

The impact of the pandemic on staff wellbeing has been harmful, causing companies to respond with support. According to our survey, the most common issues are stress, anxiety and isolation, linked to working from home constantly. Domestic problems arose when children were not at school. And a lack of regular contact with team members has also hindered wellbeing. Working at home has its disadvantages too.

Our survey indicated that additional training provided to managers to support staff wellbeing has perhaps not been adequate across the board given the scale of the problem. While 69% of firms reported a rise in employees requiring support for mental health issues, only 54% of survey respondents said their business had offered additional wellbeing training to managers. Some organisations have some work still to do.

Organisations have offered different wellbeing solutions. These include employee assistance programmes, counselling services, buddy systems and setting up mental health teams, as well as undertaking wellbeing surveys. A key factor moving forward is for businesses to learn from each other as they work through the challenges.

Annual pay review

Planned changes in staff remuneration

Broadly speaking, pay rises were spread evenly across organisations, or in some cases, were weighted to give bigger increases to junior staff. The consensus is that pay rises have been provided fairly by northern-based firms.

Employee retention is a key driver behind remuneration shifts. And it's unsurprising to see that training and development is a key investment area, with just over a third of businesses increasing training budgets for the year ahead.

The rise in employees working remotely means that location is now less important to employers. Already, workers in Northern England are being offered higher salaries from southern/London based organisations. This will eventually impact overall northern pay scales, although the impact of this development is not being widely felt yet.

Organisations may still be wondering if they have adopted the right approach to remuneration in terms of attracting and retaining talent. We expect companies to engage in remuneration benchmarking and on a more regular basis to remain competitive.

How Hays Travel is addressing the changing market

Hays Travel, the UK’s largest independent travel agent, had to close all its branches at the start of the Covid-19 pandemic. The business underwent a strategic restructuring process and established a new contracting services division which has supported Public Health England with inbound and outbound calls during the last 18 months. This diversification strategy has enabled the business to continue delivering ongoing support to Hays Travel customers wishing to cancel or reschedule holidays.

Offering these services has been consistent throughout the pandemic, says People Director Becky Robson, however, with trading constrained, it has been challenging to reward employees. Hays Travel colleagues, she explained, earn a basic salary and are then incentivised by the commissions they earn through selling holidays. Further, staff are also used to enjoying business trips abroad such as attending conferences in Turkey or on cruise ships. The pandemic meant that all incentives were paused in March 2020.

According to Becky, Hays Travel’s values have been instrumental during this challenging period: “We’ve been creative around employee welfare and wellbeing,” she said, “reinforcing our values more so than ever before.” One way in which Hays Travel has done this is by continuously celebrating success. The contracting services division, for example, has been a lifeline for the company and the business has used the success of this initiative to reinforce the organisation’s “ongoing commitment to protecting its family of employees.”

While maximising all furlough arrangements – using flex-furlough to enable the business to “play to our strengths,” Hays Travel has also acknowledged the individual needs of colleagues and supported hardship wherever it could. In Becky’s view, the message around reward is never about cash. Rather, by offering people a great experience and creating an “environment for colleagues to be their true selves and to reach their potential,” Hays Travel has ensured strong staff retention while keeping employees motivated and engaged.

“I fundamentally believe that reward takes a back seat to culture. If culture is front and centre in your organisation then it will guarantee your workforce is motivated and engaged, more so than any type of financial-based reward.”

Talent management and recruitment challenges in the year ahead

Disciplines with the greatest skills shortages

According to our survey, 93% of organisations are currently recruiting new staff, with 84% stating that they will recruit either the same number or more employees this year. Hiring will certainly be accelerated further over the summer months. This environment creates real challenges.

Most companies are finding it hard to secure the right talent across a wide range of disciplines.

Unsurprisingly, firms are finding it particularly difficult to recruit IT and Manufacturing/Engineering professionals. Generally, organisations are struggling to find the requisite skills to fulfil mid-level roles – the key area you need to strengthen to achieve growth. There’s a strong belief that finding junior talent is less challenging.

How McBride is addressing talent attraction/retention

McBride is a leading European manufacturer of private label household cleaning products with just under 3,500 employees.  In February 2020, the business began moving from a functional structure to a new divisional strategy. The new operating model was launched on 1st January 2021 and Chief HR Officer, Jane Cronin, explained how talent management is essential to achieving its goal of £1 billion turnover over the next five years.

According to Jane, McBride’s talent management framework is focused on “getting the right colleagues in the right place, with the right skills and behaviours at the right time.” A five-point underpins the overall strategy:

1. Develop future leaders/increase current capability to retain talent 2. Develop Future skills. 3. Sharing Knowledge/Information4. Build a Flexible/Resilient Workforce. 5. Attract the best talent to join us

Jane and her team used the Covid-19 pandemic to realign the company’s Employee Value Proposition with the new strategy. And at every monthly executive team meeting, there is now at least two hours dedicated to discussing the people agenda. Furthermore, Jane says providing managers from across the organisation with a talent management tool kit, helps to “bring to life our talent management process in a coherent and consistent way.”

Each level within the business, regardless of function, has a clear development plan. The business also has a system for identifying “high potential” employees and has created training initiatives to help employees progress through the organisation – from “individual contributors” to business growth, right through to the Executive level.