Buck Bond Group
Cost savings through rewards and benefits

Cost savings through rewards and benefits

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Many organisations are taking a hard look at what’s needed to keep the business going, and are considering dropping or lowering the priority of anything that is not critical to the ongoing operation of the business.

We’re seeing many rewards and benefits teams starting to be challenged on identifying efficiencies and waste that can help protect cash and jobs. As the crisis unfolds, it’s important to be prepared for all eventualities, with back-up plans and solutions to do your part in supporting organisational resilience.

We’re working with several companies at the moment doing just this, looking at the effectiveness of their existing rewards and benefits arrangements, and where greater value can be achieved. And we wanted to share a selection of some of conversations and considerations underway to help you address similar issues in your organisation:

  • Many businesses are looking at delaying, postponing or even cancelling pay increases, bonuses and annual benefits enrolments – and modelling the cost vs benefit of doing so
  • Where pay increase deferrals are being implemented, consideration needs to be given to the impact on salary-related benefits and employers need to decide whether they implement changes mid-year, or simply allow pre-increase deductions to continue
  • Companies with a more immediate need to save cost and are doing so with changes to benefit design, such as reducing employer pension contributions percentages. This has its challenges, however, in that often employee consultations are required before making any changes
  • Some employers are planning additional holiday sell windows later in the year, but it’s important to recognise that this an additional cash cost to the business at a time when most businesses are feeling at least some pain
  • To minimise financial stress on people, international businesses are prioritising furlough programmes in countries with more robust Government-backed financial support
  • Workforce modelling and reshaping can identify where more flexible resourcing strategies might generate better value-for-money – such as identifying transferable skills and applying them to the parts of the organisation that need them most, locating workers in lower cost countries and identifying where contingent labour might be more appropriate than permanent.

Bringing this all together, here are our top tips for protecting the health of your business at this time:

  • In this period of caution and vigilance, take the time to ensure you have contingency plans for all eventualities – identify where potential savings might be found and which ones are slow, medium and fast to deliver should you have to
  • Weigh up the cost/benefit of changing rewards structures. Some are hard to do and create reputational risk that will have longer-term impacts on your organisation
  • Analyse your workforce in terms of distribution of skills, headcount and rewards. Reconsider how you resource the organisation for optimum value for money