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How we might reward employees of the future

9 Feb 2021269 Views

Ken Charman, chief executive at uFlexReward, explores the ways Covid-19 could impact how we recruit and reward people for their work.

We’re all very aware of the pandemic’s impact on how we work, but could it transform how we get paid too? Ken Charman, chief executive of uFlexReward, thinks companies will be “pressing the button on radical changes” this year.

“If we change something as huge as not having to come into the office, are there other aspects of the employer-employee contract we can change that we all thought were fundamental?” Charman asks.

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uFlex Reward is a Unilever HR-tech spin-out that is looking to change how employers reward staff using digitisation and consolidation of data. Its platform is based Unilever’s digital reward system that has been used for nearly a decade, and Charman’s team has been looking at how companies might change their approaches after Covid-19.

Moving away from the traditional five-day week could be on the cards for some companies in the future, Charman says, but so could adopting a system that doesn’t classify work by a profession or a “rigid job description”. Instead, there could be a “metered working model” that classifies the skills that can be contracted for a particular project.

“Metered work is where organisations pay for much shorter time units than the old-fashioned annual salary or a day rate,” he says. “Where everybody, including people already employed by an organisation, has a value that relates to their skills and level of experience of those skills.”

‘The idea is to retain talent with critical skills, rather than simply trying to get away with paying as little for labour as possible’
– KEN CHARMAN

“With businesses trying to move away from grade hierarchies and rigid job descriptions, skills will become an essential new commodity in the market for talent,” he adds.

“A constantly updating catalogue of skills will be matched to a ‘schedule of rates’, essentially a price register for skills that is updated in real time to reflect the spot market for talent and experience, allowing organisations to build small teams of people whose skills between them can complete a project.”

However, Charman emphasises that careful thought and planning is a must if companies are making a big change. “Given that this shift to the future of work is primarily the result of an 11-month remote working model, implementation could be rushed without going through the appropriate due diligence.

“Just because many were forced to adapt doesn’t automatically mean these are the right changes to implement. Despite how progressive they may appear, these trends towards performance-related pay systems pose a potential threat to the pursuit of pay equality, as well as raise some serious tax issues.

“For example, if organisations can simply select labour based on the lowest cost to the organisation, how can they ensure an equal representation of women and minorities are applied to each project?”

So how could companies get a metered working model right? According to Charman, you need to remember what exactly you’re trying to achieve.

“The intention behind skills-based compensation is to create a more dynamic reward structure,” he says. “The ideas are intended to retain talent with critical skills, rather than simply trying to get away with paying as little for labour as possible.”

Paying ‘skills allowances’ could help. Charman says these would be more closely aligned to variable market rates, encouraging employees to invest in “hot skills”.

Can we really ‘work from anywhere’?

While working from home has become the norm for many companies in the past year, some have started to eye up the ‘working from anywhere’ model in the longer term.

And though businesses are adapting to their staff members’ changing needs, Charman advises against rushing to a new home outside of the big city in the hopes of saving on rent.

It’s important to remember that many salary rates are location-dependent, he says, which means they are paid according to the local market. So, if you decided to move from London city to a more rural area, for example, you might not continue to get paid that London salary even though you’ve stayed in the same job.

“We’ve already seen large organisations like Facebook announce that, although employees can work from home for the next five to 10 years, their salaries are likely to be adjusted in line with the cost of living in an individual’s chosen location,” he says.

It’s great that more companies are offering the flexibility to work from different places, Charman explains, but employers and employees alike need to pay attention to the negotiation that may come with that.

Lisa Ardill
By Lisa Ardill

Lisa Ardill joined Silicon Republic as senior careers reporter in July 2019. She has a BA in neuroscience and a master’s degree in science communication. She is also a semi-published poet and a big fan of doggos. Lisa was appointed careers editor in January 2021.

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