Paydata captures a decade of pay and reward trends

In 2009, business optimism was at its lowest as the UK amidst the recession. 53 per cent expected a decrease in their revenue. The outlook picked up swiftly by 2010, with those expecting a decrease dropping to 18 per cent. This gradually reduced to around only five per cent expecting reductions in revenues in the last five years.  Between 2009 and 2010 the percentage of organisations expecting a revenue increase jumped from 12 per cent to 55 per cent. Optimism peaked in 2015 with 74 per cent expecting an increase, just before the start of political uncertainty around Brexit in 2016.

In 2009, 58 per cent expected profitability to decrease, which dropped to 11 per cent in 2010. Since 2010 the percentage of those expecting an increase has gradually grown to 60 per cent, but the gradual year on year increase of these respondents has again leveled off since 2015, as the uncertainty of what Brexit will mean for trading conditions constrains optimism around trading conditions.

Budgets for day-to-day costs remain constrained. In 2009 budgets were being actively reduced for 54 per cent of respondents whilst 38 per cent did not expect any change. In 2019 21 per cent also face reduced budgets, but more employers (57 per cent) anticipate levels to stay the same. HR teams need to continue to deliver within limited financial parameters.

Budgets available for training and development are increasingly ring-fenced. In 2009 54 per cent experienced a reduction in budget, as opposed to 14 per cent 2019. 51 per cent in 2019 expect budgets to remain unchanged, in contrast to 32 per cent in 2009.

There is also more opportunity for projects and new development costs and reward management costs. Following the recession, around 40 per cent faced an active reduction in these budgets. The majority of respondents, around 80 per cent, now face no change or positive increases to these budgets.

This focus on reward and actively listening to employees is critical to overcoming recruitment and retention issues that employers continue to face. The top three priorities suggests that pay decisions are being designed holistically, with regard to the wider market conditions set in context with direct feedback from employees themselves.

Focusing on competitive pay and addressing employee satisfaction through opinion surveys is perhaps a direct result of limited budget that HR teams have faced over the last ten years and ensuring that employee turnover rates remain steady by managing employee engagement.

As definitive detail on Brexit continues to be delayed amidst a leadership contest, ongoing political turbulence contributes to the pressure that remains on HR teams to achieve more with less. Teams have to think outside the box to work within constrained budgets that have dominated the HR landscape over the last decade.