Could the impact of COVID be a fairer workplace?
Employee experience could hit the employee pay buffer hard in the coming months. It is rare for employers to link pay policies with employee experience, because money does not create experience. Think about how we make each other feel by exchanging gifts as opposed to cash during special celebrations. Where it does come into play is when pay is perceived as being unfair or not enough for the work done, in which case the experience is not a good one.
There is plenty of forecast data, including the Reward & Employee Benefits Association (REBA) June coronavirus snap survey, showing huge swathes of employers have implemented, or are planning to implement, pay cuts, are delaying pay reviews and deferring bonuses.
How employers manage the pay versus experience dichotomy, once we pass the “we’re all in this together” phase, will be telling.
Should pay cuts be higher at the top?
I interviewed dozens of reward directors at leading global and UK companies over the past four months. They are very aware of the need to avoid a perception of “us and them” in their workforces. So REBA was not surprised to see research data showing pay and bonus reductions have been, and will be, more common at executive level in 2020.
There is a rising desire to see a more responsible approach to executive remuneration as well as a desire for a greater focus on the reward experience for those employees lower down the pecking order who are struggling financially or on the frontline at greater risk.
The world is in a state of flux; everything has to be put on the table to work out what will get us through this. The role of pay within the employee experience needs to be part of this rethink if we want workers to productively engage in the major changes and innovations that will need to be put in place by all organisations over the coming months and years.
How corona humanised the workplace
The COVID-19 pandemic has shifted dials in both positive and negative ways. In the positive direction, many of those working from home have experienced the humanisation of work. We now know the names of workmates’ pets, can recognise colleagues’ children by sight, know who lives alone and who is caring for vulnerable or elderly relatives.
This humanisation of the workplace has also meant acknowledging the rich differences between us. Sadly, the negative coronavirus dial has exacerbated societal gaps and unpicked improvements in equality in the workplace that have been hard won over decades.
Employers did not have to report on gender pay gaps this year due to the pandemic, although thankfully a number of employers who truly care about gender pay equality still did so on a voluntary basis. Let us hope these vital regulations will be back in place in 2021 so we do not lose more ground.
Employers must address ethnic inequality
Ethnicity pay reporting has still not been legislated for, despite the consultation having closed in January 2019. The death of the African American George Floyd by a white police officer in Minnesota and the subsequent rise of the Black Lives Matter movement globally has increased pressure on employers to act on ethnic inequality in the workplace. The excuse that ethnicity data in the workplace is too complicated is not a good enough reason to do nothing when the result is pay inequality and discrimination.
Pay gaps and reward unfairness down to gender, ethnicity, socio-economic class, disability and age create an appalling employee experience.
Employers who choose to use the sweeping changes of 2020 to be agile, creative and risk new ways of thinking will be the ones most likely to thrive. This will include reworking fundamental employee experiences, such as fairness and responsible reward, to achieve a more engaged and productive workforce at all earning levels.