Moving Post-Pandemic Reward and Benefits Strategies from ‘I’ to ‘We’

I couldn’t believe that unsociable, tardy old me, who has failed to turn up on time to many a pensions seminar in my career, was rushing to finish a paper on Friday morning in order to ensure that I wouldn’t be late for my weekly ‘fix’ of the reba coronavirus webinar, this week on executive incentives and share plans. The lockdown will have changed all of us. It has certainly made me, newly self-employed, truly appreciate the benefit of sharing in the latest knowledge and information in such a fast-changing crisis; and in just feeling a part of this great little community of fellow, hard-working enthusiasts that Debi and her colleagues have done such a great job to create.

Broadening out from the personal effects, I still had the concluding words of Rabbi Lord Sachs on The Today programme’s Thought for the Day echoing in my head: ‘we’ve been too much suffering together to go back to where we were’.

‘When the worst of the pandemic is over’ the Rabbi had questioned ‘ what kind of future will we seek…to go back to the way things were, or to try to create a more just and caring society?’.

Professionally it’s a huge question for those of us in pay and benefits. The last Austerity-dominated, supposed ‘jobs miracle’ decade saw a huge growth in low paid, low skilled jobs of especially young and female workers employed on precarious contracts; while shareholder- and individual-driven incentive plans drove continuing escalation in executive remuneration and differentials. The focus in benefit plan designs switched away from collective security to individual choice and flexibility,

We in HR were the people who set those pay levels and drafted those zero hours contracts, often unaware that these workers relied on state in-work benefits (also being cut) and had kids living in poverty. We designed those executive LTIPs, closed those DB pension plans and set up the employee assistance helplines, which earlier reba webinars have suggested have often been found to be wanting and inadequate in genuinely supporting our employees when they have been most in need through the crisis.

‘Collective suffering can move us from ‘I’ to ‘We’ ‘ explained the Rabbi.

Certainly this sense, as the chief executive of BP wrote to employees on April 23rd, that we are ‘all we pulling together in a massive way to beat the health threat that has turned our world upside down’ has been strongly reinforced by the experience. And it should be leading us, as Janet Cope warned us on the webinar, to guard against a ‘knee-jerk return’ to our pre-crisis reward strategies.

Even economists seem to have caught the vibe, with Chair of the Office of Budget Responsibility  Robert Chote telling Andrew Marr this morning that we should regard the ballooning public debt as an investment, with no need for a return to Austerity. And politicians on all sides have been rushing to distance themselves from the leaked HM Treasury document containing a range of future Austerity options, including a public sector pay freeze, to claw back on the unprecedented ￡300 billion of financial damage of all this (the worst since the Great Freeze of 1707?!).

I am certainly questioning why a chief executive of a FTSE 100 company, who has taken a 25% voluntary pay cut, needs to return to their former remuneration of ￡4 million pa when this is over, when that ￡1 million sacrificed could move 1500 of his workers from the National Living Wage minimum to a real Living Wage that means they can afford to live.

None of us watching the remarkable and moving BBC footage last week of the medical staff treating virus victims at the Royal Free Hospital in London; or who have witnessed our care workers, with some of the highest mortality rates from the virus of any occupation, braving it every morning on the NLW (now without their travel time paid for) to drive to my parent’s house and get mum up and dressed and dad shaved – can surely support a future pay freeze, but rather would want better wages, conditions and careers in the future for these remarkable staff. Don’t we?

I was so proud in this regard of the speakers on Friday’s reba webinar and the wider reward and benefits community participating. Proud of the amazing hard work they have all been doing to deal with the immediate crisis, be that: ensuring the furlough scheme operates effectively for their staff, or moving from 5% to 95% of staff working at home almost overnight (Legal & General); or setting in place enhanced or wholly new support at remarkable speed for staff working at home – from mental health all the way through to child and educational support. And proud too for the dawning realisation that we really do have the opportunity now to move our reward world from ‘I’ to ‘We’.

Sure, there was the odd tired old defence of our poor old hard-working executives operating in global labour markets, blah, blah, the sort of thing we would probably have heard from everyone just three months ago. But now it just sounds remarkably outdated, like the Marquess of Bath reportedly complaining about the lack of currant buns after being forced to sack his second pastry chef in the period of pre-War austerity.

Instead, we heard Roger from Legal and General and Janet from Tapestry pointing to the significant growth in interest in all employee share plans, despite the stock market fall. There were also references to the widespread questioning of the executive LTIP model and its potential replacement by simple restricted stock plans; as well as the need which Helen from Cocas Cola emphasised as a future ‘new world’ priority for better measures and reporting of non-financial metrics on employees and sustainability.

Janet also pointed to the dissonance which the crisis has highlighted between what she labelled as the ‘economic value’ and the ‘social value’ of many of our keyworkers, which she hoped would be addressed by higher pay as a result of their visibility and importance becoming obvious during the pandemic. And does this too imply that some jobs are similarly over-valued in economic terms, like corporate executives perhaps?

Roger Fairhead ended the seminar in a sense by repeating the Rabbi that morning in our own narrower reward world sphere, with an admonishment to us all not to ‘let 2020 be a ‘lost year’, think what we have all learned and how we have responded’; and therefore how we can do things differently and better in the future, post-coronavirus rewards world.

So what are you going to do differently?

Me? Aside from my crusade on care workers awful pay and conditions, and encouraging you lot to review and renew your reward strategies, I’m signed up for next Friday’s reba webinar.

Copyright: Duncan Brown