On 28th January the annual post-survey event for the QCG Regulators and Inspection Related Bodies Survey took place. This event provided a space for survey participants to network with each other, discuss topical issues, and explore key findings and additional analysis from the survey.

This document provides an overview of key discussion points from the event.

The importance of the Employee Value Proposition

Survey data analysis indicated that pay budgets for 2021 (an interquartile range of 1.1%-2.0%) are predicted to be lower than actual budgets in 2020 (interquartile range of 1.9%-2.6%) – with a pay freeze coming into effect for organisations under the HMT pay remit.

Both the upcoming pay freeze and budgetary pressures for those outside of the HMT pay remit are unsurprisingly due to the financial consequences of COVID-19.

When discussing pay budgets for the year ahead, a number of attendees indicated they are focusing on developing and improving their EVP offering – specifically in the following areas:

Recruitment

Event participants highlighted that developing a strong EVP can help recruitment in several ways.

Firstly, a well-articulated EVP can focus the offering on aspects of work past base salary – for instance work-life balance, flexibility of work patterns and locations, and non-cash benefits. This allows organisations to differentiate themselves from competitors, align expectations from candidates with the employee experience once recruited, and potentially save organisations money in the longer term.

Secondly, the development of an EVP can broaden recruitment pools – appealing to a more diverse profile of candidates, both in terms of the Diversity and Inclusion agenda but also open up opportunities to recruit international candidates.

In turn, this will help recruitment processes for hard-to-fill roles e.g. specific roles in digital and legal where our analysis shows premiums of 12% and 10% respectively compared to median survey results.

Wellbeing

COVID-19 has had a positive impact on pushing wellbeing initiatives forward, and organisations have focused on ensuring a balanced offering, covering mental, financial and physical wellbeing.

Organisations discussed a variety of interventions they have recently delivered in order to help employees through the current climate:

• Facilitating the delivery of flu jabs – whether on-site, or through other locations such as pharmacies; and
• Financial wellbeing initiatives e.g. financial education sessions, offering access to funds.

In the current climate, and with the upcoming budgetary constraints outlined earlier in this note, financial education can play a vital role in the wellbeing agenda in 2021.

Financial wellbeing can cover a range of topics and the different circumstances of individual employees – from managing debt, saving for a house or preparing for retirement.

By implementing financial wellbeing initiatives, organisations can demonstrate their support for employees and they are doing what they can in these difficult economic times. This can help increase trust from employees in the organisation, and possibly help some boost their productivity – if employees are less anxious and worried about their finances this provides them with greater capacity to focus on their job.

Defining flexible wellbeing

Attendees acknowledged that whilst more flexible working works for some employees throughout the pandemic, it is not necessarily the case for all employees across the organisation.

Attendees discussed how flexible working is about engaging with individual employees to define flexible working past just location of work – in turn providing employees with more choice of ways to manage work and home life. This is important as employee’s ideas of flexibility is likely to differ – some employees will view this as remote working, whereas others who may not be able to work remotely will view flexibility as reduced or varying hours, job sharing or even being able to take more annual leave.

Event attendees outlined they are beginning to look to the longer term and are reviewing what the organisation needs from their employees (past their presence), what flexibility truly means to each employee, and what employees need from their employer in order for flexibility to work successfully for them.

When reviewing future ways of working past the pandemic, organisations will need to carefully balance individual employee preferences with the organisation’s operational necessities.

A good first step is for organisations to implement a long-term flexibility strategy, and communicate a set of flexibility principles in line with company values, in order to guide conversations and decisions pertaining to flexible working. This in turn creates greater transparency and consistency of these decisions across the workforce.

Reviewing the rationale behind regional pay

Survey data analyses indicated that London base salaries see an average premium of 9.2% in comparison to national base pay.

Attendees discussed changes to ways of working in light of COVID-19 and whether the rationale behind regional pay differentials are still valid. With remote working proven to be a viable long-term approach, the extent to which a salary premium is relevant for home-based roles is under question.

A number of attendees highlighted that reviewing regional pay differentials and the rationale behind them is on the radar - however, it is too early to draw firm conclusions from the data at present relating to changes in costs of living, availability of skills in different regions, and other factors impacting regional pay.

Similarly to the ‘flexibility principles’ outlined above, it is important that organisations have open and transparent conversations with employees outlining the decisions being made in this area.

QCG are constantly monitoring the impact of the changing world of work on regional pay – and we will update you on any developments in this space.

Continued emphasis on the Diversity & Inclusion agenda

Attendees highlighted that Diversity & Inclusion (D&I) initiatives are high on the agenda. Although the majority of D&I initiatives are often owned by talent management, reward has a role to play moving forward.

Firstly, organisations are focusing on their EVP to ensure they attract and retain a diverse pool of candidates and employees. In particular, a focus on flexible working (e.g. flexible working patterns, enhancing parental leave/pay, enabling the buying and selling of annual leave) can remove barriers to recruiting employees with protected characteristics.

Secondly, focusing on the application of the cash compensation package can also uncover areas of risk relating to D&I. For instance, comparing the positioning of base salary between the entire population with employees of protected characteristics can uncover biases in promotion opportunities.

Additionally, performance-related-pay comparisons between demographics can also flag potential biases in the types of roles more likely to receive an award – which may also correlate with the likelihood of an employee with a protected characteristic filling these types of roles.

QCG are now providing Equality Impact Assessments to help organisations uncover these areas of risk. You can find more information about this via /services/reward-consultancy/reward-analytics/equality-impact-assessment/.

The QCG Regulators and Inspection Related Bodies Survey is the most reliable source of specialist reward data in the sector, including policy, salary and benefits data from leading organisations. For additional information about QCG or the survey please contact Peter Fairchild on ku/oc/gcq//retep.