The rewards leader's guide: How to maximise the impact of your budget, from a cost-of-living lens

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"Whatever we do, we work for what’s best for us – C&B teams have a role to play in making sure amidst rising cost of living challenges, we continue to attract, engage, and retain employees," HR leader Shafnas Siddiq affirmed. Event report by Aditi Sharma Kalra and Priya Sunil.

Total Rewards Asia Summit, Singapore, returned in its 12^th edition this year, on 26 and 27 July 2023.

The two-day event saw 150 CHROs, compensation & benefits, and total rewards leaders coming together at Marina Bay Sands to uncover solutions for attracting, engaging, and retaining employees amidst a competitive labour market and rising cost-of-living pressures, while also ensuring productivity for them and the business.

Among the highlights of the event was a fireside chat with Shafnas Siddiq, Head of People Strategy and Excellence, Borouge, who shared with HRO's Aditi Sharma Kalra his views on aligning strategies to meet the needs of today's workforce, ethical considerations in budgeting, and more.

*Note: All views expressed by Shafnas Siddiq are from personal experience, and do not represent the views & practices of Borouge or other organisations.

Read on for excerpts of the conversation below:

"Whatever we do, we work for what’s best for us – C&B teams have a role to play in making sure amidst rising cost of living challenges, we continue to attract, engage, and retain employees," the leader affirmed.

Looking at the financial challenges employers face today, he highlighted:

First and foremost, leaders should note that it is not just the fact that it's about salaries or flexibility anymore. It is, instead, more about their mindset and the role of work in their life and how their work promotes their overall wellbeing; whether they have a sense of purpose in their work; whether they are getting instant gratification out of it; and whether the job embeds into their passion.

Next, he talked about the impact of the budget, and how to maximise its impact, on which he noted three points:

First is we want to make sure that you have very specific objectives as an organisation on what you want to use your budget for. Do you want to use it for attracting your best talent? Do you want to retain critical expertise? Basically, as an employer, where do you want to compete?
Second, we need to look at regional differences. Are there places where we could look at to get talent which enables us to have a cost arbitrage? This, Shafnas said, is very important, because we do not want to keep spending our budget in high-cost markets. While talking about spending the budget, the leader added, we want to make sure that you're only spending the budget developing core competencies that the business needs. "You don't want to spend your budget developing non-core competencies."
Third, it is important to create a balance between the fixed and the flexible compensation and rewards. This balance differs for every company, as it depends on your own situation and industry.

In relation to the above, we have to look at ethical considerations in budgeting, which come in the form of ensuring fairness, equity, trust, and transparency, he shared. "You need to make sure that your salary or compensation conveys that people are not just coming to the organisation to be paid, or to work. Rather, it's about building that culture of fairness, equity, trust, and transparency.

"Transparency is not just about publishing a data structure, but it's really about being transparent in terms of committing to good practices. You want to stand up for good practices and do what's right by the business. And also do what's right by the employees. You have to pay fairly for all jobs."

He aptly pointed out: "When we talk about increments, it’s always a way to support wage erosion, to ensure that pay remains relevant and has value in the market. It’s about creating an understanding. For instance, it’s about creating transparency with employees – if you have to tell them know you can’t increase their pay to meet the inflationary measures, you have to let them know that we are all in the same boat, it affects both sides – the organisation is also impacted by such pressures.

"Essentially, it’s about rationalising with employees. And how to do that is to create a more inclusive feedback system, more on a regular basis. It’s about creating trust, wherein employees come to work with us because they want to be part of that journey, and they trust the organisation to reward them because they are contributing to the journey."

Keeping all of the above in mind, where do we start when it comes to setting in place and communicating our rewards strategy?

It starts with creating fair and just job descriptions, our speaker shares. The job descriptions can be a great marker because they highlight exactly who's doing what and how much are they getting paid for. These job descriptions need to be communicated as well as externally benchmarked, giving you a head-start in the first process and ensuring the ethics behind your policy are being communicated.

In that vein the following can be considered when it comes to external benchmarking:

Ask yourself and your team: What is your compensation & benefit philosophy in place? Why do you actually pay employees? Are your performance and rewards linked?
Identify the relevant metrics that you want to benchmark. You don't want to just benchmark whole and sole; you want to look at what's relevant to your benchmarking. For example, it could be based on location, industry, and the size of the organisation.
Ensure that you have clear job levelling based on the scope of the job. This comes back to ensuring that you have solid and transparent job descriptions in place.
Ensure your data is time relevant, as well as industry relevant.

Following that, looking at the aspect of flexibility in compensation & benefits – this, Shafnas affirmed, is no longer restricted to "large organisations with deep pockets." He made the point that in fact, for smaller organisations, this is a great opportunity to be agile and nimble and to respond to the needs of talent. Why? It is harder in large organisations given that they have a lot of policies and a lot of stakeholders to consult before anything can be done.

In SMEs, however, this is not always the case, which can thus be seen as a benefit to these companies.

Overall, the leader iterated that a rewards strategy today should be about having a holistic approach that goes beyond benefits – and looking at flexibility beyond just, for instance, flexible work arrangements; and instead, flexibility in other aspects such as pay.

"Focus on your own capabilities that drive the business in your market, and spend your market there. Do not spend your budget on creating non-core competencies or non-core requirements. It’s about creating a holistic total rewards strategy that looks at both tangible and intangible provisions:

Am I able to create a sense of purpose for employees to work and buy into my vision?
Am I able to create a career growth plan?
Am I providing growth, development, and learning opportunities? For employment in the long run?"

Human Resources Online would like to give our heartfelt gratitude to all speakers, panellists, moderators, and micro-workshop facilitator for lending us their time and expertise towards the success of this two-day platform: