As businesses strive for equity, more frequent reviews and better communication about pay structures are expected. These efforts will not only help bridge the equity gap but also enhance employee trust.
3. Recruitment and retention: tackling labour market pressures
Labour shortages and competitive market conditions are placing unprecedented pressure on recruitment and retention strategies. Over the last six months, 42 per cent of organisations faced recruitment difficulties, and 35 per cent struggled to retain employees. The challenge is set to persist, with nearly 2 in 5 employers anticipating continued recruitment struggles in the next six months.
To attract new talent, 48 per cent of respondents have offered salaries up to 20 per cent higher than those paid to current employees, exacerbating internal pay equity challenges. Flexible working remains a critical tool, with 65 per cent leveraging it as a retention strategy.
This competitive landscape calls for innovative solutions, including targeted retention bonuses, skills development programs, and enhanced engagement initiatives to foster loyalty.
4. Bonuses and non-financial incentives
Bonuses remain an integral part of reward packages, with 68 per cent of organisations offering bonus schemes. However, the bonus landscape is evolving as companies face financial constraints:
- Trends in Bonus Payments:
- 65 per cent expect the number of employees receiving bonuses to remain unchanged.
- Bonus sizes are also stabilising, with 46 per cent anticipating no change.
- Criteria for Bonuses:
Bonuses are increasingly tied to a combination of performance metrics:
- 63 per cent use a mix of individual, team, and company performance.
- Individual performance alone accounts for only 8 per cent of bonus decisions, reflecting a shift towards holistic evaluation.
Amid tightening budgets, many organisations are exploring non-financial rewards, such as recognition programs and flexible benefits, to supplement monetary incentives.
