Article: Being honest will help ease the message about low or no pay rises: Paul Johnstone

Benefits & Rewards

Being honest will help ease the message about low or no pay rises: Paul Johnstone

Paul Johnstone, Head of Global Benefits, Orange Business Services, United Kingdom, in conversation with People Matters, talks about the evolving benefits landscape post-COVID, assessing performance based on online presence vs results, and managing rewards amid the financial setback for employees.
Being honest will help ease the message about low or no pay rises: Paul Johnstone

Paul Johnstone, Head of Global Benefits, Orange Business Services, United Kingdom has more than 25 years of industry experience across a variety of international reward roles. With a strong expertise in managing benefits programs, compensation & bonus planning up to and including executive level, team leadership, and extensive experience in mergers and acquisitions, Paul is currently responsible for the global employee benefit plans of Orange Business Services, in addition to his role as the Chair of Employee Benefits Committee for pension and Health & Welfare Benefit plans in the US and a trustee of pension plans in the UK and Ireland.

Prior to joining Orange Business Services in 2017, Paul spent over two decades in GE serving in different Reward leadership capacities across the UK and EMEA region. 

In this exclusive conversation with People Matters, Paul talks about the evolving benefits landscape, his take on assessing employees basis online presence vs results and advises how employers should go about managing rewards if they’re unable to bounce back to previous pay levels. 

What has been your biggest learning about yourself, your peers and your leaders in the last six months? 

An acceptance of a higher degree of informality. With so many meetings taking place either via a video conferencing tool or by phone, people are more relaxed about dressing in a less formal way, interruptions from young children, pets, spouses, noises from the street, etc. which has in turn led to an acceptance of a less structured way of working.

The colonial mindset around working from home being synonymous with lesser work being done has been challenged by the endless hours of work being put in by leaders, managers and employees. Yet, the perception of correlation between online visibility and amount of work done prevails. What is your take on this?   

Employers who have recognized that ‘time in the office does not equal quantity of work completed’ had already embraced the concept of allowing their employees to structure their time themselves with the result that the only thing that matters is that the work is completed satisfactorily. 

This has led to these employers becoming increasingly attractive to the more effective employee. As the success of these initiatives becomes more widely publicized, their competitors and other employers more broadly look for ways to copy these practices and thus attract these more effective employees. The end result of this will be that this perception will become obsolete.

As business and HR leaders look to reset workplace and people policies in the new reality of work, how is the benefits landscape changing? 

This will vary from business to business depending upon how successfully that business has navigated the COVID-19 pandemic. Those that have done well (e.g. the tech sector) will likely look to introduce additional benefits that can support the physical, mental and financial well-being of their employees. These additional benefits will be either fully funded or require a small element of employee cost sharing.

Those that have become more financially stressed may well eliminate benefits altogether (except where they may be mandatory) and replace them with a budget that the employee can use to spend how they want. Such employers may provide easy access to a range of selected benefit providers, possibly setting a minimum that the employee should spend on certain benefits (e.g. pension, healthcare, protection). This will allow them to strictly manage the budget available without being subject to annual increases caused by rises in the cost of the benefits.  

How have the expectations of employees changed post-COVID-19 from their employers in terms of benefits? 

The economic impact of COVID-19 on all countries will accelerate the trend of governments to shift the responsibility for the provision of a range of services to employers and as a result employees will increasingly look to their employer to help them to meet their well-being needs. 

In many countries, employees already had a higher level of trust in their employer than in the government and COVID-19 has only reinforced this perception. As a result, the employee’s perception will be that they should look to their employer for their security, rather than the state. 

Have you introduced any particular benefits to help employees navigate the current crisis? Did you face any challenges in implementing them? How responsive are employees, in terms of participation and availing these benefits today?

At Orange Business Services, we already had a global employee assistance plan (EAP) which we have leaned on to help us to deliver global webinars to our employees to help them to manage their mental well-being throughout the pandemic. Our provider is now helping us to prepare employees as they start to return to working in the office. Therefore, we have not introduced any new benefits, merely tweaking some to ensure that employees and their dependents had access to the right medical care should they need it.  

Industry-wide pay cuts have sent several employees 2 or 3 years behind in their financial standing. With finances expected to be in a slump for an unpredictable time period, what reward strategies can organizations consider to help employees navigate these challenging times? How should employers go about managing rewards, particularly if they’re unable to bounce back to previous pay levels?

This is all going to come down to how employers communicate to their employees about this.  Employees will understand that COVID-19 has had a severe financial impact on the global economy and on their employer.

Being honest about what can and can’t be done will help to ease the message about low or no pay rises.

Line managers will also need to back this message up by demonstrating to their direct reports that they fully support the message and by ‘putting their arm around their employees’ to show understanding and empathy.  

In your opinion, are organizations in a place today to explore alternative ways to compensate employees? For instance through experimenting with shorter work weeks or adjusted hours, etc?

Other than providing targeted cash rewards to those employees that have gone above and beyond to support the business through the crisis, I can’t see employers providing alternative compensation.

What are your priorities with regard to adapting to the post-COVID-19 world?

As with most companies we will be looking at how we can be more cost effective with how we purchase our benefit programs, however for me, I believe that this situation has given us an opportunity to change the approach that we take to how we talk to our employees about the benefits we provide.

Our approach to providing benefits has been relatively passive, merely listing the benefits we provide. However, if we become better at explaining why we have provided a certain benefit then this will have a deeper meaning for the employee and thus reinforce the bond between our employees and us. 

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Topics: Benefits & Rewards, #RethinkPerformanceandRewards

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