Three key trends you need know from the 2013 CIPD Reward Survey

Fresh off the presses, the CIPD’s 2013 Reward Survey provides some excellent insight into the way organisations are thinking about the role of pay and benefits in their organisations in the year ahead.

While the operating environment for organisations – particularly those in the public and voluntary sectors who face ongoing budgetary pressure – remains challenging, the overall theme presented by the report is one of organisations applying fresh thinking about how reward can best support the needs of employees and the objectives of the business in a sustainable way.

The first sign of this comes from a desire to move to a greater element of variable pay and away from fixed pay.

Cost control has a role to play in this but so too does the desire to retain and reward those who contribute the most to an organisation. As the report notes, it can be particularly powerful as a tool to underpin the behaviour and values of an organisation. What I take away from this is that employers have learnt the lessons of the bubble years up to 2008 and are thinking harder about ensuring reward delivers on the right long term business objectives.

Linked to this is the second striking trend in the report: a desire for benefits to play a greater role in the reward mix. As the reasons for this are unclear from the research we are left to guess why it might be. It could be linked to a broader intent from employers to reduce the emphasis on basic pay or an attempt to extract more value for the employee from each pound invested in reward – one of the main advantages of investing in benefits.

I wonder whether the answer lies in a different area and that employers may be starting to look more creatively at reward propositions which employees really value of which pay, traditional benefits and ‘policy’ based benefits like flexible working play a role.

The last area of interest is the compelling case the report makes for better communication around benefits and reward. It is clear from the report that this ambiguity starts with the HR team (as we see from the contradictory figures around the value of training as a benefit) and so extends into the business.

If organisations are to realise full value from their investment, they need to start with defining exactly what it defines as a benefit and the overall reward proposition and then communicating that investment to employees. Total reward statements articulate an employer’s appreciation and investment in an employee, and can have a powerful role in driving employee understanding and appreciation of benefits and reward – one of the most important pieces of internal communication a company can deliver. The fact that nearly 9% of organisations plan to implement such a scheme next year will only help.

While any research like this has to have its boundaries there are two areas missing from this year’s report which I would like to see in the CIPD’s 2014 research.

The first of these is the extent to which the use of data to drive insight around reward and benefits strategy is coming to the fore. The second is the impact of technology on the design and delivery of reward strategy.

For me these are two of the biggest themes which should be driving thinking about reward in the year ahead.

Andy Philpott is sales and marketing director at Edenred – you can access more insights on our knowledge hub – www.edenred.co.uk/ehub/