The Work Reimagined Survey found pay to be the number one determinant of whether an employee chooses to stay in a role or change jobs. Private enterprises should therefore consider whether their current pay rates give them the best chance of attracting and retaining talent in a highly competitive skills market. At the same time, they have an opportunity to think not just about how much they reward people, but also what they are rewarding them for – in terms of both output and the behaviors they demonstrate. Total reward strategies – which combine financial compensation with other customizable benefits, such as flexible working, extra vacation time and training budget – still have an important place in incentive schemes. Nevertheless, the pay element of these strategies requires close attention by private employers, or they risk losing skills.
4. Performance management
As private enterprises embark on change programs, they are looking to align their performance management with their revised growth strategies. Transformation has widespread implications for the responsibilities and working practices of both individuals and teams. Yet, too often performance management processes lag behind strategy change and overly focus on the performance of individuals, failing to recognize that it is the performance of teams that makes the greatest contribution to outcomes.
Also, it is not only outcomes that matter – behaviors are equally important, if not more so. Research by EY and the University of Oxford has found that in a successful transformation, leaders invest at the outset to build the conditions for success, both at a rational and an emotional level. Almost half (46%) of respondents from high-performing transformations had established a process that encouraged innovative experimentation, while also ensuring that failed experimentation would not negatively impact people’s career or compensation.
5. Entrepreneurial spirit
Private enterprises, and rightfully so, often pride themselves on the entrepreneurial spirit of their workforce, which enables them to innovate and progress. Nevertheless, maintaining this entrepreneurial spirit is not a given as the business scales and grows. It needs to be nurtured and developed, like any other business skill. Culture is key here – so a focus area for private enterprises is creating and maintaining a culture that encourages agility, innovation and the flourishing of new ideas.
Overcoming the strategic disconnect
While people have always been a major growth driver for private enterprises, the pandemic has further underlined their significance as a strategic asset. Increasingly, C-suites are asking how they can more effectively embed their people strategies into their overall corporate strategies, considering physical and mental wellbeing alongside topics, such as performance management, retention and reward, and strategic workforce planning. Yet, although C-suites acknowledge the people imperative, in practice, there often seems to be a disconnect between their priorities and those of their employees. Interestingly, new ways of working and flexible working arrangements were not part of the top five people-related priorities as found in the EY research when looking at over 1,300 private companies’ recent strategic growth plans. Furthermore, the EY 2022 Work Reimagined Survey found that around a fifth (22%) of private employers believe that all members of their workforce should return to the office five days a week. This is despite private employees, on average, wanting to work 2.9 days remotely.