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UK Hopes and Fears Survey: Why ‘the great rethink’ must follow ‘the great resignation’

Radical change is required to recruit and retain top talent

Employers face a growing challenge to recruit and retain top talent if they don’t act decisively and think creatively about packages for employees that combine reward, opportunity, flexibility and purpose.

Almost one in five UK workers (18%) say they are very or extremely likely to change jobs in the next 12 months, according to research by PwC. The survey of 2,086 UK workers found that only 45% of respondents are not likely to look for a new role in the next year, which means that the remainder are weighing up whether they should move.

Why are employees unsettled?

There has been much talk of a ‘great resignation’, created by the pandemic forcing people to reappraise their work expectations, while creating a pent-up wave of people looking to move on.

The UK also finds itself in a position where unemployment is at its lowest level since the 1970s, with vacancies at an all time high and competition for talent fiercer than ever.

The confluence of such factors put employees in a strong position. And while the threat of recession may make some think twice about moving on, the competition for key talent and the risk of significant churn will persist.

The PwC Hopes and Fears research reveals around half (54%) of employees are very or moderately satisfied with their current role. With only 5% stating that they are very dissatisfied, the research suggests other significant factors beyond job satisfaction are weighing on the minds of employees.

The dramatic rise of remote and flexible working, accelerated by the pandemic, has become a major issue. The findings reveal a series of gaps between what people want to do, and what they are doing. Tellingly, it’s not just people who want to work remotely, but can’t, who are unsettled.

Hybrid gaps are starting to show

As pandemic-enforced ways of working ease and working patterns change accordingly, employees are getting a better sense of how they want to work and what choices they’d like to make. Some are deciding they do not want to work the patterns they did pre-pandemic, while others are only too keen to get back into the workplace. While hybrid is the clear preference for most (62%), a significant portion (31%) say they would prefer fully remote working and 7% would rather work in-person full time.

What is clear however, is where there is a disconnect between employees’ personal preferences on remote and hybrid working and employers’ expectations, an opportunity is lost for engagement and satisfaction.

Not all employees can work remotely - including 46% of survey respondents - and they report less satisfaction with their job than those working in hybrid or fully remote work settings. They are also less confident that their employer is transparent, less likely to recommend their employer as a place to work and less likely to equate positive statements - such as “I can truly be myself at work” and “I find my job fulfilling” - with their current employer.

Vicky Robinson, Hybrid Workforce Strategy & Culture Leader at PwC UK, says:

“Employees are crying out for flexibility, about how and where they work. They want choice. They want to be empowered to be productive and to work in a way that best suits their personal preferences - however those preferences may change - while supporting the goals of the organisation.”

Victoria Robinson,
Hybrid Workforce Strategy & Culture Leader at PwC UK

“The winners in all of this will be those organisations able to take a human approach to understanding these challenges and opportunities, before applying the framework, the technology and the support needed for a more customised approach that works for different employees while optimising their productivity and the productivity of their teams.”

The rise of the remote worker

Over recent years we have seen a rise in the fully remote worker, and organisations are tapping into this demand as an opportunity to attract a wider, more geographically diverse workforce.

However, what is clear from the data is that this fully remote population is less settled than their office-based, or hybrid-working peers. Around a quarter (26%) of these workers are extremely or very concerned about being overlooked for developmental opportunities, 22% of them are extremely or very likely to switch employers compared to 17% of those who are full time in person.

“While there can be clear business benefits for employers to tap into these remote working talent pools, they need to think carefully about what the right employee offering is for these populations.” says Robinson. “Organisations must work out what experience they are providing for remote talent, how they ensure their inclusion and keep them engaged and motivated on an on-going basis.”

It's about more than money

Right now, there is a significant focus on cash, against a backdrop of high inflation, and organisations are taking various approaches to target their salary budgets in key areas. This will continue for 2022, particularly at the lower end of the pay scale. The data already shows high earners feel far more fairly rewarded than low earners and that gap may widen as the rising cost of living continues to bite.


Fairly rewarded

53

Of high earners believe they are fairly rewarded

26

Of low-earners believe they are fairly rewarded


However, in the longer-term we need to think beyond cash. Our research reveals just 14% of respondents believe they are unfairly rewarded for the work they do, compared to 36% who believe they’re fairly paid.

This is good news for progressive employers as it means they do not need to get drawn into an unsustainable spiral of constant wage increases, in a business environment that will put greater emphasis on careful cost control. But it does mean they need to focus more on less tangible elements of the employee value proposition.

Employees are judging the package they get from their bosses on a broader range of measures. Flexibility and where people work are clearly important considerations. Employees also need to feel a sense of progress and development. Currently just 31% of respondents feel they have a clear plan to advance their career with their current employer, while 16% say they do not.

Alastair Woods, Reward & Employment Partner at PwC, says:

“Money will always be a major consideration but organisations need to get more creative, more radical and a lot braver in designing packages that appeal to the needs and preferences of all their people. They need to think about how that package can be customised, about the relationship between salary and flexible working patterns, about the funding and availability of training and development and all forms of recognition and reward, from perks to performance bonuses. They need to understand what will aid retention and what will attract talent - and as we enter a more challenging economic cycle they should think about what unlocks productivity.”

Alastair Woods,
Reward and Employment Partner at PwC

“Part of the challenge is understanding the extent to which different people value very different things but also how that might change as their circumstances change over time,” adds Woods. “Similarly, how differently people can view the same things. Our research shows the importance placed on training, particularly by younger employees, while flexible working patterns are well received by the workforce as a whole, but to a greater degree by older workers. So an element of customisation, where an employee feels they have a say, can be a really powerful tool to unlock engagement and productivity.”

“Some of this is about creating a bolder overarching strategy, but it’s also about better connecting things at a tactical level. We often find there are lots of good things organisations do but they tend to be piecemeal and disconnected. There is an opportunity to build a more compelling, more complete offering here by creating a package that is truly complementary, built on choice and the ability to customise.”

“If employers don’t implement more radical change around the packages they offer they put their most prized talent in a position of only being able to compare base salaries. That also puts them in a position of base salary increases being a disproportionate and costly lever for driving retention, when the data tells us it doesn’t have to be.”

What employees want next

When choosing a new place to work, employees are clearly thinking about the elevated importance of flexibility and location and a role where they feel supported and empowered, both professionally and personally.

Almost half (48%) want greater choice over the hours and days they work, and 46% want greater choice over where they work. Culture is also a clear consideration, with people looking for organisations where they can be themselves and where they feel cared for.

The research reveals a sizeable gap between employees’ expectations around such matters and the experience they are getting in their current role.


Meaning matters

63

Want a job where they feel they can truly be themselves

60

Want a role where they feel their team cares about their wellbeing

46

…feel that is the case in their current role

44

…feel that is the case in their current role


A disconnect on ESG, trust and transparency

The progress organisations are making towards greater environmental, social and governance (ESG) commitments is also increasingly being cited as a consideration for employees in decisions about who they want to work for.

Speaking to PwC for the 25th Annual CEO Survey, Elona Mortimer-Zhika, CEO of Iris Software, said: “I get interviewed about [ESG] by new recruits. People expect this. They want to work for companies that are kind, that are giving back, that are sustainable.”

But having commitments in place must be backed with clear and meaningful measurement - a point emphasised by another CEO Survey participant, Amanda Blanc from Aviva. “Accountability can move the dial on ESG,” said Blanc. “I am a big believer in what gets measured gets done.”

Employers still have some way to go in gaining confidence among employees that they are transparent on ESG matters. When asked how confident employees are that their employer is actually transparent about issues such as sustainability (45%), and diversity and inclusion (51%), there are clear doubts for around half of respondents.


Transparency confidence

55

Are extremely or very confident their employer is transparent on their record around protecting worker health and safety

48

Are extremely or very confident their employer is transparent on their impact on the economy (jobs, taxes, wages)

51

Are extremely or very confident their employer is transparent on diversity and inclusion

45

Are extremely or very confident their employer is transparent on sustainability


Sarah Moore, Head of People and Organisation, PwC UK, says: “When it comes to recruiting and retaining talent, organisations cannot afford to ignore the growing importance of purpose and ESG.”

“A clear purpose, backed with meaningful and measurable action, makes an organisation more attractive to talent. This is especially true for the most in-demand talent with the greatest freedom to choose who they work for. And this trend isn’t going to slow down. Initiatives such as net zero, the reporting of pay gaps and non-financial outcomes will keep companies’ ESG commitments and their reputations in the spotlight.”

Sarah Moore

Sarah Moore,
Head of People and Organisation, PwC UK

“Furthermore, people aren’t going to settle for heartfelt words and best-intentions, or be fooled by purpose-washing and green-washing. They want transparency around the journey organisations are on. They want to see a clear, credible plan and unambiguous reporting. They want to see how they will be making a difference by working for an organisation whose purpose aligns to their own personal values.”

“Increasingly this will be a measure of not only ESG performance. It will be seen as an indicator more broadly of how trustworthy an organisation is. And it will also impact how investable organisations are and how customers view them. In turn, that will directly affect their ability to recruit, retain and reward top talent, because it will impact their financial performance if investors and customers are turned off.”

Think about the full package

This research confirms it’s no longer enough for companies to offer a fair salary, or even a job which is satisfying. They need to think about the whole package around it, from what they offer employees on flexibility to the ways in which they build trust in ethical and purpose-led commitments.

With competition for talent more fierce than ever, and in-demand employees feeling confident about their prospects of getting a better package elsewhere, it is vital organisations take steps to close gaps between their offering and their employees’ expectations. This will mean getting creative with a broader offering, from sabbaticals to wellbeing to personalised training and remote working - that employees can draw upon. It may also mean losing some of the things no longer aligned to future ways of working such as traditional performance management processes.

“The organisations that will succeed in a fierce competition for talent will not be the ones that just throw money at reward. It will be those that can engage employees on a distinctive set of offerings that signpost new ways of working and better reflect the changing workforce mix,” says Woods. “This is an exciting opportunity for HR to reimagine the employee value proposition, unshackled from tradition.”

 

Contact us

Sarah Moore

Sarah Moore

Head of purpose, PwC United Kingdom

Tel: +44 (0)7734 607421

Victoria Robinson

Victoria Robinson

Hybrid Workforce Strategy & Culture, PwC United Kingdom

Tel: +44 (0)7843 368488

Alastair Woods

Alastair Woods

Reward and Employment Partner, PwC United Kingdom

Tel: +44 (0)7834 250359

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