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CIPD: communication tops the list of reward issues facing HR professionals

More than three quarters (78%) of reward professionals continue to be concerned about the ability of their organisations to manage reward risks, according to the annual Reward Risks Survey by CIPD.

In particular, they are concerned about achieving the balance between affordability and the need to offer competitive reward packages as demand for key skills picks up and employees' appreciation of the value of total packages diminishes.

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Although the top risks identified remained consistent with previous years, the survey shows a shift in priorities this year, in line with the wider business and economic challenges facing organisations. Some risks have moved up the scale of importance while others have become less relevant:

  • Employees don't appreciate value of total reward offering 1 (5)
  • Unable to increase pay levels due to budget constraints 2 (8)
  • Line managers have poor understanding of reward 3 (2)
  • Reward is not perceived as fair 4 (9)
  • Inability to change reward practices quickly 5 (1)
  • Employees don't understand performance and behaviour requirements 6 (6)
  • Reward not engaging employees 7 (3)
  • Incentives not motivating 8 (11)
  • Reward unable to attract key skills 9 (1)
  • Reward not retaining talent 10 (6)

Charles Cotton, rewards adviser at CIPD, said: "In the current economic climate, reward specialists are understandably concerned about budgetary constraints but are also even more frustrated that employees don't fully appreciate the real value of the total reward packages that are already being paid. Perceived fairness and equity in pay and reward also seems to be much higher on the list of concerns this year than it was in 2010.

"Reward risks are clearly shifting in line with organisational and economic imperatives, but what the survey also highlights is some interesting international differences: in the UK the majority of rewards professionals are preoccupied with juggling costs and aligning rewards packages with changing business strategies and goals whilst maintaining positive perceptions of reward packages amongst employees.

"Meanwhile, many organisations in Asia, the Middle East and Africa are going through a period of massive expansion and struggling to recruit and maintain talent. One of the biggest concerns in these so called 'emerging markets' is ensuring that benchmark data for rewards packages is up to date.

"For multinational organisations, the challenge is to ensure consistency and equity across multiple locations while taking into account inevitable cultural and economic differences."