Global uncertainty is ushering in a new period of restrained growth and higher inflation. We are witnessing a period where organizations are flexing how to deal with inflationary pressures and higher cost of living.
- Are organisations reviewing their ‘total rewards’ policy above market value or performance related?
- Is the management focusing on high performers & critical roles?
- Have companies got a fit for purpose career and job architecture in an ever changing digital environment?
Organizations are taking a proactive view of cost and impact and reviewing internal policies, which will dictate if they pay premiums for the right talent. It may not be spraying common base pay increases for all this time. In the last 12 months, we are living with highly unusual inflation and unpredictable world of after-shocks of the pandemic and the recent crisis in Ukraine.
Organisations tend to offer a range of benefits from how they do the onboard, recruit, retain and engage the employees. The recent higher cost-of-living environment in the Gulf requires a different approach to managing total rewards. A more focused approach outside of increase in salary is called for. If we have learnt the lessons from the pandemic and take it forward, organisations need to look at the following key levers in ever changing world of employment:
- Job and career architecture to ensure opportunities are created to grow talent.
- Pay progression within the set salary policy to reward the right talent.
- End-of-service and pension benefit are in place to offer protection and security.
- Sick leave, maternity and better health, wellbeing and welfare policies.
COVID-19 has definitely shaken up what was regarded as boring benefits such as sick leave or wellbeing. We are witnessing more organisations re-defining their total rewards model. Total reward can only survive after Covid and in the current talent war and cost-of-living crisis if its meaning and application are reborn into a new, more engaging and responsible approach.
Pay-equity is more important than ever before. Collecting and analysing other data which may indicate underlying causes of pay gaps. For example, frequency of promotion, off-cycle pay increases, performance rating distributions, rates of different groups entering or leaving the organization.
Identifying, recognizing and retaining high-potential talent will be a critical factor in getting through this challenging economic storm. Companies will be looking to recruit and retain key critical individuals, as well as maximize cost efficiencies and avoid a broader fixed salary spend to counter rising inflation.