Dark days ahead. By Deborah Moon, HR Consultant

As summer draws to a close, it is noticeable how the nights are starting to draw in and one can detect a distinct chill in the early morning and late evening air. The weather conditions associated with this changing of the seasons and prospective onset of autumn appears to be echoed by the general economic and employment context. Barely a day goes by without the release of yet another set of gloomy statistics or survey outcomes underlining the financial and business challenges faced by organisations and individuals, both those in work and those seeking employment. 

With pay awards, where made, continuing to remain below inflation, households are grappling with the squeeze on spending power and the rising costs of many everyday essentials, including food, energy and transport. The continuing fragility in the employment market, combined with significant job losses in the public sector add to this feeling of uncertainty. Recent figures issued by the Office for National Statistics highlighted the rising numbers now working part-time, record rates of unemployment for women and increasing unemployment amongst 16-24 year olds.

This economic and employment gloom was echoed in the latest CIPD Labour Market Outlook survey, which found that positive hiring intentions seen in the past year have disappeared and more organisations are planning to lose jobs rather than to recruit. With the effective management of organisational and service costs remaining a key business imperative, there is a continuing need to review and reduce workforce expenditure, ensure value for money and achieve operational efficiencies.

As the future for economic stability and growth remains uncertain, the focus must be on reward practices which support and encourage performance and productivity and which show a demonstrable impact on the “bottom line”. But how can this be achieved at a time of significant financial restraint? With the increasing demand for creativity in reward practices it is, perhaps, timely to reflect on some of the key challenges:

Are all elements of the reward package integrated within a coherent employment offering which is tailored to organisational and employee needs? What is the balance between the pay and non-pay elements? How much choice and flexibility is available/provided?

Are pay and reward practices perceived as fair and transparent? Do employees understand the various components of their reward package and how this relates to team, service and organisational performance and priorities? How effective are reward communications and do they convey the total value and range of benefits available?

Although training budgets are also under pressure, are there alternative ways of providing learning and development opportunities so that career progression can be maintained? Does the organisational culture engender a sense of purpose, build and maintain loyalty and commitment? And is there an enjoyable working environment which encourages team working, mutual support and collaboration?

As we enter a new season, we look to find ways to keep cheery during the winter months, encouraged by thoughts of the springtime to follow. In the same way, organisations need to focus on reward initiatives which will maintain morale and motivation and retain and nurture talent during these difficult times, and ensure they continue to build for the longer term recovery.