While countries like China, India and Singapore are experiencing a very competitive labour market as a result of supply and demand shifts (more job opportunities than skilled workers); employers in the United Kingdom are facing entirely different challenges as it relates to their employees. The number one challenge that UK employers face are a de-motivated workforce. Fortunately UK employers can tackle these challenges through innovative methods like comprehensive employee loyalty programs.
Before we can discuss the issues of today, let’s first take a look at the demographic, market and economy in the UK to see what has happened in the past couple of years.
The population in the UK exceeds 62 million. 92.1% of the population is white (English, Scottish, Welsh and Northern Irish). The literacy rate is 99% and the most predominant language spoken is English. 31 million people make up the workforce in the UK and 80.1% are employed in services, 18.2% in industry and 1.4% in agriculture.
The UK entered its worst recession since World War II in 2008, as part of a global economic downturn. The economy began to climb its way back into growth in late 2009. The economic down turn caused many companies in the UK to downsize, laying off employees and freezing hiring entirely. This has resulted in employers facing major challenges as it relates to keeping their remaining workforces positive and motivated.
In January of this past year, the UK telegraph reported that managers in the UK are facing a mammoth challenge in the year ahead to keep staff motivated against what has become a “new norm” in the UK; employers implementing pay freezes and, in many cases, pay cuts. The companies’ explanation for this practice has been that pay freezes and pay cuts have been implemented as an alternative to mass layoffs.
The Chartered Institute of Personnel and Development (CIPD) reported that its latest research revealed that two fifths of employers failed to even share the reasoning behind cutting, freezing or raising pay last year. Fewer than one in five related their reward decision to an individual’s performance.
The challenge to this practice is that, with no alternate measures in place to revive employee morale and motivation, short term monetary gain will mean long term monetary pain to these organizations. When such a massive number of companies are adopting this practice to the point that it is being considered “the norm” and employees are not motivated and/or committed, the result can be reduced national productivity.
The challenge for employers is that they must come up with ways to keep staff motivated at work while many employees see their living standards lowered. Organizations must review how they communicate the economic realities that the business faces while exploring other methods to incent and reward employees.
Performance based rewards remain a great way to for companies to reward top performers during tough economic times. Through performance based loyalty programs, those who remain motivated to achieve will stand to reap benefits based on their overall results and performance. These rewards can then be redeemed for merchandise, entertainment, travel and more, which will provide the employee with a sense of accomplishment and a feeling that their employer appreciates their service even though the employer is not in a position to provide a wage increase. In the end, the company makes more money because the employee is receiving incentives based on performance. At the same time, the employee is recognized for their performance and incented accordingly vs. the company providing merit increases across the board whether there has been stellar performance or not. For this reason there is a huge market and opportunity for loyalty programs providers in the UK.
Programs providers who provide web-based (Software as a Service) loyalty programs to companies in the UK are in a position to help UK employers come up with unique and innovative ways to incent and motivate their top performers even during times when economic conditions are not ideal.
If you are an Employee Recognition, Incentive or Loyalty program provider who is interested in entering the market in the UK with the world’s leading “white labelled” Software as a Service (SaaS) based system delivering global rewards, please contact Rob Purdy at 905-477-3971 at Global Rewards Solutions or visit www.globalrewardsolutions.com.