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Top ways to ensure your reward strategy is fair and inclusive

Posted on: Monday August 10, 2020

The notion of inclusivity has never been more prevalent in the workforce. We are now in our third year of gender pay gap reporting, with ethnicity pay gap reporting legislation on the horizon. As such, the need for employers to demonstrate that they do not discriminate regardless of age, gender, race, disability or sexual orientation, has never been more important.

However, diversity and inclusivity are not just important due to legislative reasons; these factors have a direct impact on the success of your organisation. Research has indicated that a more diverse workforce leads to a better performing and more profitable organisation. McKinsey’s Delivering through Diversity report (2018) identified that gender and ethnically diverse companies were more likely to outperform their competitors at 15% and 35% respectively.

Inclusivity may also refer to the types of workers within your organisation. For example, do contingent workers receive the same benefits? Freelancers, agency staff, zero-hours contract workers et al make up 20% of the UK’s workforce, and this is set to increase in the coming years. Failing to consider these workers in your reward arrangements means you risk alienating and demotivating a significant section of the workforce.

How to build a fair and inclusive reward strategy

Your employee reward and recognition strategy should ensure that you can retain, motivate and manage your talent. But how do you ensure that everyone’s contribution is rewarded in a fair and consistent manner?

1. Keeping employees’ pay equal

Already subject to an existing legal requirement, men and women should receive the same pay regarding their assigned role and experience. However, this applies not just to gender but age, race, and other protected characteristics. This also applies to opportunities for salary increases – for example, does a specific demographic of employee tend to get pay rises more often than others?

An equal pay audit can establish any areas where your business may be lacking and help protect you from potential litigation.

2. Benefits

Employee benefits packages should be developed using an all-inclusive approach and should constantly evolve based on the needs of employees. By using data analytics to decide what’s meaningful to employees, and tailoring your benefits offering to fit the needs of your workforce, you can ensure that inclusivity is at the forefront of the reward agenda. Benefits data can be found either by measuring uptake of benefits via your employee experience management system or by using methods such as surveys.

Ensuring your benefits offering is inclusive can be achieved by using a flexible benefits scheme, whereby the same benefits are available to everyone, but employees can swap and choose benefits which suit their lifestyle; for example, younger members of the workforce may prefer schemes to help get them on the property ladder, while older staff members may prefer more generous pension contributions.

3. Demographics

By collecting data regarding the demographics of your organisation you can determine a baseline breakdown of how diverse your organisation is. If you establish that there is a lack of diversity, then steps can be taken via recruitment and progression strategies to resolve this.

4. Recruitment and progression

By maintaining hiring records, you can easily look at the people who are joining the organisation and who is being turned away. From this, you can take a view on whether there is an ‘ideal’ employee being routinely recruited. If so, challenge the status quo to improve the diversity outlook and engage in fair employment practices. The same strategy can be used to determine if there is any bias within career progression pipelines, as it is important to be mindful that hiring with diversity and inclusivity in mind isn’t enough – new hires need to feel secure, respected and that they can progress within the organisation.

5. Compare to national averages

Keeping abreast of the nationwide trends will help give an indication as to whether you could be doing more to ensure an all-inclusive reward strategy. By understanding what other businesses are doing, particularly businesses that are doing inclusivity well, you can find new ways to progress your strategy.

Article featured on REBA website on 10th Aug 2020


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