Build Back Better: the future role of DEI, employee wellbeing and reward strategy in evolving company culture
As well as accelerating working practices, Covid has amplified our social conscience by highlighting the great inequalities in our society. The press and social media have been filled with examples of people supporting one another, raising money for good causes and coming out in support of movements such as fair pay for essential workers. Consequently, employees are looking to their organisations to demonstrate that purpose isn’t being sacrificed for profit, that their employer is doing the right thing and not simply paying lip service, thus driving a shift towards a more compassionate style of leadership and social responsibility.
When we think about evolving company culture, we are really talking about the personality of an organisation, how people feel about the work they do, the values they believe in and where they see their company going. The result of the last year and the desire to build back better means that people are expecting their leaders to steer their organisations in a way that is more impactful on both the world around us and communities we serve, as well as treating employees in a more socially responsible manner. This means that we need to reconsider the way we think about aspects such as DEI, employee wellbeing and reward strategy, and ensure that they align and support this focus on social consciousness.
The Black Lives Matter movement and the disproportionate impact of COVID on ethnic minorities has caused many companies to reflect on their Equality, Diversity and Inclusion (EDI) practices, recognising that previous attempts to boost EDI have fallen way short of the mark. According to the CIPD, the inaugural McKenzie-Delis Packer Review found that in many areas of inclusion & diversity there were gaps between what companies said and what they actually did in practice; whilst numerous companies said they were making progress on gender or ethnicity diversity in their leadership teams, less than half had specified diversity in succession planning. The review also found while most companies said they had processes in place to support employees with disabilities, over 40% hadn’t explained the importance of disability inclusion to their staff. If we truly want to build back better, we need to identify the unique ways our business can embrace opportunities to boost efforts at interventions that are meaningful to our employees. Whilst doing things like ethnicity pay reporting are helpful to establish where you are on your journey, to meet employee expectations you need to communicate an understanding of why you are where you are share action plans about what you plan to do and choose initiatives that fit with the context and journey your organisation is on, listening and learning from your employees, and educating them as part of that journey.
Organisational culture is reinforced by the messages we inadvertently send – trust for example is significantly impacted by saying one thing and then doing another. When it comes to evolving Reward strategy and wellbeing initiatives, if we want to demonstrate we are truly building back better we need to go back to basics and identify the role of fairness, consistency, equality and transparency play in the way we reward our employees. The role of equality for example and the concept of ‘levelling up’ has been more prevalent the last year – whereas historically we have been used to differentiating benefits by role or contract type, there has been noticeable a shift towards equalising and removing these differentials. Not all of it is pandemic related - UK Corporate Governance Code, which suggests Pension Contributions for Executives in listed businesses should be aligned with the wider workforce, has contributed with most companies having either reduced executive director pension contribution rates last year, or have committed to do so by 2022. However, the disproportionate impact of the pandemic on lower paid, contingent, and blue collar workers has led many companies to review and change the terms of their benefits to make sure employees were protected, with some enhancing sick pay for those on hourly rates or enhancing death benefit cover for contingent workforces. REBA’s wellbeing report last autumn reiterated this, suggesting more inclusivity with a 50% increase in number of employers providing benefits to all employees, and other surveys conducted last year have suggested many organisations had made changes to special leave including standardising annual leave for the whole organisation. The concept of wealth redistribution has been proposed by Autonomy together with the High Pay Centre in a publication arguing that excessive salaries should be capped to save industries & redistribute wealth. Their recommendations include redistributing the earnings of the top 1% of earners to boost the wages of low earners, and capping wages at £100k, stating that 69% of the public support capping wages at one of £100k, £200k or £300k. Some forward-thinking responsible businesses such as Brewdog already have a salary cap in place and this concept is likely to continue to gain traction particularly amongst businesses with a social purpose.
If we want to build back better, we need to ensure that we bring together our various strategies around reward, wellbeing and inclusivity to make sure they align and support each other, measure our progress and openly share and shape the direction with employees. This means moving beyond simply having policies or bland statements around responsible reward to communicating outcome metrics that show how and whether you are treating your employees fairly, creating a benchmark that evidences your practice and not just intent.
If you'd like to discuss your responsible reward strategy in more detail, and establish a plan to help you build back better, please contact us via email (firstname.lastname@example.org), or call our consultancy team on +44 (0)20 3457 0894.