A recent Korn Ferry survey revealed a sharp increase in the number of organizations that are planning no salary increases for a majority of employees in 2021.  Those organizations that are planning salary increases anticipate giving much lower increases than this time last year.  Many of those businesses planning increases are also increasing salaries for only the most critical employees and functions.

Korn Ferry suggests that if companies want to retain talent and ensure their employees continue to feel valued and rewarded, they’ll have to get creative with non-cash rewards.  Potential approaches include:

• Overall financial well-being: Forward-thinking businesses are now looking at overall financial well-being.  Some organizations in the US, for example, are giving younger employees with student loans the option of using their matching funding to pay down their debt rather than going directly to their defined contribution pension account (401k).  Other organizations are paying off a part of the loans in lieu of a bonus or helping employees refinance their educational loans at a lower rate.
• Wellness: Increasingly, organizations are offering healthcare plans with a buffet of choices, designed to meet the needs of the individual.  And the focus is proactive—keeping people mentally and physically healthy.
• Work-life balance: Employers are implementing lifestyle-supporting perks designed to help employees better manage their work life balance.  For example, caregiving, which began primarily as a benefit for working mothers, has been transformed into a more universal offering designed to help all employees, no matter gender or age, care for any dependent.

Non-cash rewards also go beyond benefits.  For technical, professional and managerial employees, having clear career paths and plenty of developmental opportunities are key drivers for satisfaction and retention.  And the good news is that investing in individual development across the business is a win-win.  Employees feel valued, and organizations benefit from a strong internal talent pipeline.  Developing employees’ cognitive talents (agility, inclusivity, leadership) and technical abilities (sales, project management, people development) can deliver both employee engagement, and help meet strategic business goals.

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