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Article | Executive Pay Memo – UK

Preparing for a post-pandemic world: three major HR themes

Executive Compensation|Compensation Strategy & Design|Total Rewards|Talent
COVID 19 Coronavirus

June 2, 2021

We explore important HR themes and highlight key case studies of how we’ve been working with organisations as they plan for their post-pandemic operations.

In light of the COVID-19 pandemic, organisations had to react quickly in order to get work done in a virtual environment, protect their employees’ health and manage costs effectively. With the ongoing mass vaccination programme, there is optimism that the business world can return to relative stability in 2021, at least in some parts of the world. Over recent months, Willis Towers Watson has conducted over 100 interviews with organisations across the globe and found that there are three major themes that organisations are focusing on in order to prepare for post-COVID-19 operations. See our original article on this research: Preparing for a post-pandemic world: Transforming human capital and benefit actions. These themes are the following:

  • Transforming work and Total Rewards – new ways of working and aligning Total Rewards to support the change
  • Advancing commitment to employee wellbeing and building resilience
  • Optimising costs to invest in people where it matters most

In this edition of Executive Pay Memo, we explore each of these themes and highlight key case studies of how we’ve been working with organisations as they plan for their post-pandemic operations.

  1. 01

    Transforming work and Total Rewards

    The pandemic has accelerated ongoing trends to adopt flexible work practices, automation and digitalisation, and virtual customer outreach and service delivery, as well as using alternative sources of talent. For organisations where any level of virtual workplace is retained, managers will need to find new ways to create a positive employee experience whilst assessing the performance of teams in a fair way. There has been a fundamental shift in work cultures and leaders and managers need to commit to a mindset – and actions – that support this. This also results in a need to realign Total Rewards, for example deciding whether compensation strategies should reflect the economic value of flexibility or whether rewards should put greater emphasis on collective performance to encourage collaboration. Key things that you should be considering include:

    • New ways of working – identify work for redesign and reinvention goals; enhance flexible work practices for greater effectiveness, equity and access; optimise work with talent and automation alternatives
    • Reskilling and upskilling – leverage machine learning to uncover work and skill requirements; map competencies, knowledge and skills to career frameworks; activate the career experience with increased transparency around reskilling, upskilling and outskilling pathways
    • Leader and manager development – support leaders and managers in improving their capabilities to be effective during change; provide broad-based support to managers for hybrid working teams; deliver training to build leader and manager resiliency
    • Work culture – determine how new ways of working can help to reinforce organisation values, principles and purpose
    • Alignment of Total Rewards – create an inventory of Total Rewards programmes; carry out competitive analysis against peer group and emerging best practices; identify possible ways to deliver a more effective Total Rewards package and align with where, when and how people work

    Case study 1

    In recent months, we have supported a global technology organisation in updating their career framework to a more integrated job and skills architecture, enabling managers to accurately identify skill requirements for jobs and empower employees to own their career development. The organisation recognised the need to adapt to the changing skill demands with a requirement for upskilling and reskilling, whilst providing more clarity on career development opportunities to meet the business requirements to attract top talent. The work has involved applying a more skills-focused lens to the organisation, updating the organisation’s job architecture with a skills architecture and replacing traditional job families with skills areas. Aligning employees to multiple skill areas and having a common language for skills across the business has helped to promote career mobility. It has also improved strategic workforce planning capabilities for the business as skill shortages/surpluses are more easily identifiable.

  2. 02

    Employee wellbeing

    The pandemic has highlighted fundamental correlations between physical, emotional, social and financial wellbeing and employees’ levels of engagement and commitment to work. Employee wellbeing must now be considered in a broader context than just simply offering wellbeing programmes. It now represents the mindset that is woven through culture and Total Rewards programmes. For example, organisations are recognising the importance of fair pay, equitable career opportunities and inclusive health and retirement benefits in employee wellbeing, as well as committing to a culture of Diversity, Equity & Inclusion (DEI). Greater personalisation of Total Rewards to suit diverse needs and digitalised delivery and education are also increasingly important. Key things that you should be considering include:

    • COVID-19 vaccination – develop return to workplace and work travel strategies
    • Culture of wellbeing, diversity, equity and inclusion – assess levels of wellbeing and inclusivity in the organisation culture; identify opportunities for greater equity across the organisation through pay, health and wealth benefits
    • Leader and manager development – define and implement manager listening strategies; work with employee assistance programmes (EAPs) to help develop required new skills in managers; encourage leaders and managers to share personal experiences and provide them with the tools to support listening actively and with empathy
    • Alignment of wellbeing and benefit programmes – gather insights on effectiveness of existing wellbeing and benefits programmes; understand possible gaps/overlaps of programmes and develop a multidimensional approach that puts employees and their dependants at the centre
    • Programme delivery – design a delivery strategy to ensure employees’ awareness, enrolment and in-time access for all programmes; consider navigation tools, communications and emerging delivery mechanisms
    • Sustainable human capital measurement and governance – update governance and process around human capital measurement and disclosures; seek input and engagement from relevant stakeholders on a measurement framework; ensure a broad mix of human capital factors, as well as ESG-related considerations (e.g. including measures in executive and broad-based short- and long-term incentive plans where appropriate)

    Case study 2

    We are currently partnering with a financial services organisation to enable their employees to navigate the full breadth of their wellbeing offering digitally. From policies and benefits to training and community initiatives, the organisation is looking to develop a digital tool that allows employees to see their full offering at a glance, understand how it supports their employee value proposition and discover previously less well-known elements. The tool will also allow employees to directly access resources based on their needs – be it finding support at a time of crisis or keeping on top of their day-to-day.

    Case study 3

    We are currently working with a domestic utilities organisation to help them develop a comprehensive I&D strategy and action plan, driven by their business needs post-pandemic. The needs and expectations of their workforce have shifted during the pandemic, as employees increasingly expect their employer to prioritise I&D and seek equal and inclusive opportunities in their experiences at work. In addition, from a business perspective, the continued emergence and development of new technologies requires diversity of skills and backgrounds to respond to the changing and challenging context in the market. Interestingly, the shift to more flexible ways of working helps to address this challenge, as it opens up new opportunities to recruit talent from broader pools and geographies. Our focus has been on analysing these current state challenges and opportunities and feeding this into a powerful and measurable narrative and action plan to address the barriers to I&D in the organisation today and take ambitious steps to move forward.

  3. 03

    Optimising costs

    To ensure financial sustainability through the current period of economic uncertainty, it is important that organisations understand the cost of work when introducing flexible work and Total Rewards policies. It is vital that organisations consider their Total Rewards spend and assess the effectiveness of their Total Rewards programmes to ensure they are getting the best return on investment. Freeing up funds to allow greater flexibility in work and Total Rewards costs will enable organisations to invest in sustainable human capital strategies of the future. Key things that you should be considering include:

    • Cost flexibility – identify where work redesign and total cost of work can be optimised through work alternatives; assess potential savings from reduction/elimination of underutilised benefits and provide increased choice/flexibility in offering and design
    • Total Rewards Optimisation and Prioritisation – understand the financial health and objectives of the organisation and outline primary Value of Investment (VOI) goals (e.g. reduce, keep neutral, or increase Total Rewards costs); assess the effectiveness of Total Rewards programmes in line with current and future workforce requirements to address attraction and retention challenges
    • Active management of benefit costs and risks – project benefits costs under multiple economic and demographic scenarios to understand sources of costs and risks; identify important cost implications and categorise what can be avoided; revisit ongoing benefit programme governance and operations

    Case study 4

    We have supported a leading UK retailer in optimising their Total Rewards package as they undergo a large-scale transformation project with significant changes to their people strategy. In light of the difficulties that the COVID-19 pandemic has had on retailers and the need to respond to evolving employee needs and values, there was a desire to optimise the return on Total Rewards spend and provide a relevant and competitive offering. We supported the retailer using our proprietary optimisation tools – Total Rewards Optimisation (TRO) and Total Rewards Prioritisation (TRP) – to understand the best allocation of reward spend to maximise value to the organisation and its employees. These actions have allowed for an evidence-based approach to multi-million pound decisions around Total Rewards.

Summary

Organisations have a clear opportunity to take important learnings from their experiences during the pandemic and become even stronger in the post-pandemic era. This article has presented three key themes that organisations are focusing on, but a particularly important theme that flows through all of these is employee listening, engagement and experience. Adopting an employee-centric approach to developing post-pandemic initiatives can help to drive a high-performing employee experience and, in turn, greater business performance.

Through our research in this space, Willis Towers Watson has developed a systematic approach to helping organisations map out their priorities for the next 18-24 months considering these key themes. If you would be interested in having a 1-hour conversation with us to hear more about what other organisations are doing as they consider their post-pandemic operations and plan out your priorities, please contact your Willis Towers Watson consultant.

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