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15 Oct 2020

The impact of coronavirus on pay when recruiting and retaining staff

The coronavirus pandemic has accelerated change in society in so many ways. In particular, it has acted as a powerful catalyst for greater flexible working. We’ve been welcomed into the homes of families, seen parents juggle babies and Zoom meetings, and taken the whole working world online. With more and more calls for flexibility, pay expectations will be no different.

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The rise of flexible working

Since 2014, all employees in the UK have had the right to request flexible working after being employed by their organisation for six months. Despite the legal standing, and evidence to suggest that rigid working negatively impacts employee wellbeing, flexible working has long been seen as the exception to the norm.

That was until a global pandemic turned those misconceptions on their head. The Office for National Statistics suggests that 50% of the UK workforce was able to move to working from home during the pandemic. What’s more, employees seem to like remote working, as 48% see themselves continuing to work remotely after the pandemic dies down, according to figures from Gartner. It seems that the commuter, 9-to-5 model may become a thing of the past.

Post-pandemic life will only be about increasing the flexibility that workers have come to expect during the pandemic, and that will extend when it comes to pay expectations when recruiting and retaining staff.

Employees are now looking to their employers for wider financial support

Employees are now looking to their employer for more support when it comes to their finances, and not just in the traditional sense through pay increases. Aon’s Prevention is better than a cure research found that 70% of employees would like some form of support to help improve their financial situation from their employer, while 79% of surveyed employees told Glassdoor in its Employment Confidence Survey that they would prefer a new benefit over a pay increase.

With financial pressures increased during the pandemic, employees now need more support in this area than ever before. By the end of July 2020, one third of households reported a fall in income as a direct consequence of the pandemic – a total of 9.7 million households across the UK. A further 18% reported that they had turned to forms of credit to cover necessary expenses, according to Standard Life’s Foundation Coronavirus Financial Tracker.

Increased financial pressure and the need for support has also become a factor when employees are deciding on a new role. The majority (78%) say that benefits are extremely important in their decision to accept or reject a job offer, found the Employee Benefit Research Institute. It’s clear that employee financial worries are becoming an important responsibility for organisations, and recruiting and retaining your best team will require employers to go further than a simple pay increase.

Earned wage access

Employers can answer the calls for more workplace flexibility and financial support by providing access to earned wages.

Earned wage access or earned salary access schemes simply allow employees to access their wages as they’re earned, providing increased liquidity, autonomy over earnings, and the ability to avoid short-term, high-cost credit. These solutions provide a way for employers to provide increased flexibility whilst also helping workers to build their financial resilience.

For decades, pay expectations have always skewed towards the amount employees get paid. Now, it’s all about how and when they get paid, with The Resolution Foundation outlining that ‘the huge growth in payday lending indicates that when workers get paid can matter’.

Expectations are now shifted to pay flexibility and this can best be achieved by effective access to earned wages.

For information on earned wage access for better recruitment and retention, get in touch with Wagestream.

This article is provided by Wagestream.

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