The link between reward and wellbeing: how to get the balance rightby
Reward is not just financial – it’s also inextricably linked with employee wellbeing. Failure to recognise this means HR professionals can only do the job half as well.
Are you responsible for your employer’s wellbeing programme? Or do you focus every day on delivering a first-class reward strategy? If you are delivering wellbeing, are there any reward aspects on your agenda, or has it been on the to do list for so long that it’s now gathering dust? Conversely, do you marry up the impact of wellbeing on your reward portfolio, or do you see this as corporate responsibility, something it is reasonable to assume should be provided? It is time to change this.
Reward holds many keys – yes, pay is one – but there are many other areas upon which we can have a significant impact.
The line between reward and wellbeing is fine, and keeping that balance between the two is a monumental challenge. Why? As professionals we often underestimate or overlook the interdependence between them. This interdependence is complex because it impacts on a number of levels, affecting employees financially, physically, and emotionally. So, let’s explore what this interdependence means and whether there are any tricks we are missing in getting the balance right.
Interdependency is no secret dark art
Interdependency is when two factors require each other in order to be effective. Recognising there is mutuality in the relationship is really important. When the balance is right, neither can exist without the other – but how does this work?
Since the start of March, the impact of the Covid-19 pandemic on the workplace has meant that reward professionals have not stopped to take a breath. They’ve been busy ensuring organisations could deliver for their employees, especially with regards to getting the basics right with payroll. At the same time they’ve had their employees’ wellbeing at the forefront of their minds, with many initiating new efforts to support employees suffering the widespread impact of the situation, especially for those enduring lockdown or those who were on furlough.
The furlough example is ideal. HR professionals have had so much technical ‘stuff’ going on since the start of 2020, with furlough in particular, that many may have forgotten some of the important things that make us indispensable. Administrating the furlough scheme meant HR teams were focused on demonstrating technical reward (and pay) factors, weighing up earnings and ensuring HMRC accuracy, whilst at the same time ensuring employees received the empathy and compassion they needed in this situation. Employees were dealing with many worries and concerns, such as their jobs potentially being at risk, being at home without any work to do (especially during the early days of lockdown, with limited external activities), and the anxiety they may be experiencing for themselves and their families.
Getting the balance right in this situation was about ensuring employees knew where they stood, what they would receive, and what their expectations could reasonably be. In the harder circumstances, where job losses were unavoidable, these needed to be done with dignity and empathy, in a way that helped employees to develop confidence when re-entering the job market and appreciate their value.
For employers that are differently impacted, or able to grow out of the changes that the Covid-19 situation has inflicted – such as the huge growth we are seeing with delivery companies like Amazon and increased demands on essential workers in the public and utilities sectors – it is equally important to ensure recruitment processes are engaging from the outset. There is a need to highlight the reward opportunity – so much more than a pay packet – balanced with building a relationship, even though you may not see that new employee in the flesh for some time to come.
What does this mean for holistic reward?
When people ask me what I do, and I reply ‘reward’, I’m often met with quizzical looks. When all else fails I may answer, ‘I pay people’. Sadly, this undermines reward – long gone are the days of the payroll person been sequestered in a dark corner creating the schedules for the bank in clandestine. In much the same was as ‘personnel’ developed into ‘human resources’, payroll is now developing beyond the label.
For example, whilst knowledge of Excel remains critical to the role, it is as much about being able to demonstrate the strategic value of moving to salary sacrifice for both the business and employees as it is about getting paid on time. Reward holds many keys – yes, pay is one – but there are many other areas upon which we can have a significant impact. Here are just two examples:
- Pensions: this is not just about saving for your retirement, but about your lifestyle now and later, and peace of mind for your loved ones should the worst happen. Rewards professionals can help with structuring and processes such as promoting AVC (additional voluntary contributions). We cannot, and should never give financial advice – but we can provide direction to those that can, and make sure employees are using their pension in the very best way for them. We can also highlight the connection with long-term financial security or planning at the very least.
- Global mobility (GM): this is a fairly recent addition for some, but it’s a hugely important one. Due to the correlation between GM and tax in particular, it is essential that rewards professionals consider this arena. Again, tax is the technical side, but what about the individual, the anxiety of travelling away from home, the potential impacts on their family, the concerns of the new environments and possible changes in their everyday culture, not to mention the impact on their career?
Both of these examples demonstrate that the technical facets of rewards link inextricably with wellbeing. Doing one without considering the other would only be half the job.
My challenge to all rewards professionals is to engage with your wellbeing programme and reward framework to see where the two link up. There in those overlaps is the crux of the interdependency between reward and wellbeing. If you excel in those areas your reward and wellbeing portfolio will be successful for your business and appreciated by your employees – a true win/win scenario.
Interested in this topic? Read Why employee rewards and recognition are needed now more than ever.