Flexible Work and Rewards Survey: 2021 design and budget priorities

About the survey respondents

Research findings are based on responses from 41 organizations in The Netherlands employing 180k employees. The survey fielded between October 6 and 21, 2020.

Respondents by industry

Respondents’ organisation profile:

• 12% domestic
• 27% international
• 61% global

Overview

Employers pivot to flexible work arrangements and rethink approaches to Total Rewards

In the face of the uncertainties brought by the pandemic, employers responded by embracing workplace flexibility and prioritizing organizational resilience and agility. Our Flexible Work and Rewards Survey: 2021 Design and Budget Priorities, which fielded between October 6 and 21, 2020, takes a close-up look at the current and expected future state of flexible work arrangements as well as the implications for rewards and benefit programs.

Respondents to the survey indicate more than seven in 10 workers (76%) are currently telecommuting/working from home, and they expect 65% of their workers to be doing so through the first quarter of 2021. Yet despite this significant pivot to flexible work arrangements, nearly half of organizations do not have a formal policy or set of principles to manage these arrangements, and nearly a quarter (22%) have just put such a policy in place this year.

While safety concerns will remain the primary reason for offering alternative work arrangements into the first quarter of 2021, an increasing number of employers also expect to enhance productivity, retention and employee engagement through these arrangements.

Additionally, alternative work arrangements are prompting employers to rethink their approach to Total Rewards. Roughly two fifths of employers (41%) indicate that the new work requirements necessitate a hybrid reward model. Two fifths (41%) of organizations appear to be embracing flexible work and about one third (34%) are aligning some benefits with this philosophy.

Most organizations do not expect flexible work policies to substantially affect pay and benefit budgets over the next three years; however, less than 39% of employers expect reductions in real estate expenses, and 68% anticipate a decrease in commuting expenses during this period. While some of these savings will be offset by increases in subsidies around items such as computer equipment and wireless devices, organizations have an opportunity to reinvest these savings in reward and benefit programs to help meet employees where they are.

The ability to shape a flexible workplace that meets the needs of their employees will help organizations persevere and prosper in an evolving, pandemic-altered world of work.

“As companies continue to evaluate the cost benefits of alternative work arrangements, many indicate that the workplace changes as a result of the pandemic are here to stay. Employers that are able to create and manage a flexible workplace through automation and adaptable policies while reinforcing an enhanced employee experience will not only meet the needs of their employees but be better positioned to compete in the new world of work,” said Antoinette Lefevre-Stevens, Benelux Talent & Rewards Leader, Willis Towers Watson.

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Employers that create a flexible workplace with automation, adaptable policies and an enhanced employee experience will be better positioned to compete in the new world of work.”

Antoinette Lefevre-Stevens | Benelux Talent & Rewards Leader, Willis Towers Watson

Highlights and trends

Prevalence

• Employers say that over half (76%) of their workers are currently telecommuting/working from home; they expect this number to remain high, at around 65% through first quarter of 2021.

• Employers say that their workers are also using “working from anywhere” (25%) or flextime options (33%); they increase slightly to 26% and 34% in the first quarter of 2021.
• On average, organizations currently have a similar percentage of their full-time employees working in person or onsite (38%) as working remotely/from home (33%).
• Employers expect the proportion of their full-time employees working from home to decline to 25% in the next three years. However that level (25%), will be almost three times what it was three years ago (8%).

What’s driving alternative work arrangements?

• Most organizations (88%) cite employee safety concerns as the main reason for providing alternative work arrangements.* Other important drivers include enhancing productivity (37%), promoting employee engagement (29%), security concerns (24%) and employee retention (23%).
• An overwhelming majority of employers (83%) expect that safety considerations will continue to be a key driver of alternative work arrangements in the first quarter of 2021. At the same time, an increasing percentage of employers cite employee engagement (52%), retention (45%) and productivity (42%) as important reasons for offering these arrangements in 2021.

• Most organizations do not expect flexible/remote work policies to substantially affect pay and benefit budgets for 2021.

• Almost one quarter expect budget reductions in real estate (23%) and commuting expenses (65%) in 2021. Almost two fifths of employers (39%) expect reductions in real estate expenses over the next three years, while 68% anticipate reductions in commuting expenses during the same period.
• 63% of organizations expect to see an increase in allowances and subsidies for working from home in 2021 and over the next three years (63%).
• In 2021, 4 in 5 will pay fully remote workers the same as in-office employees regardless of worker’s actual locations for all jobs

Policies and principles

• Prior to this year, nearly half (46%) of organizations did not have a formal policy or set of principles to manage alternative work arrangements; 22% just created a formal policy this year.
• Nearly 3 in 5 organizations that do not have a formal policy are planning or considering adopting one to manage alternative work arrangements
• Most organizations (75%) with new policies expect these policies or principles to be permanent.

Eligibility

• Job function and discretion are the most common criteria to determine eligibility for using alternative work arrangement, now (59%) and in the future (36%). Interestingly, at some organizations, all employees will remain eligible, now (50%) and in the future (68%).
• One fifth of organizations (20%) do not think jobs that will be performed through telecommuting or working from anywhere are likely to be offshored over the next three years; on average, organizations expect about 10% of the jobs that will be done through telecommuting or working from anywhere are likely to be offshored over the next 3 years.

Opportunities for improvement

• Fewer than one in five organizations thinks its current job architecture (17%) and job leveling process (10%) supports developing a flexible and agile workforce to a very great extent. Much higher percentages say their current job architecture (37%) and job leveling process (37%) do not support these objectives at all.

Organizational effectiveness

• Almost half (46%) of organizations indicate that they are effective at recognizing the need to create a more agile and flexible workforce.^**
• 41% say they are effective at retaining critical talent (employees and contingent workers) with needed technology skills.

Manager effectiveness

• Almost half (45%) of employers think their managers are effective at coordinating the delivery of work using multiple alternatives, such as employees, independent contractors, AI, etc
• Over a third (36%) of employers think their managers are effective at helping workers focus equally on what customers will need tomorrow and what they require today.
• JJust 24% think their managers are effective at communicating and leading change around the new combinations of humans and automated workers.

• Just 15% of organizations have an integrated digital and business strategy that enables new sources of value.
• Nearly 7 in 10 organizations (68%) have provided employees with digital tools and technologies to help them to be more productive^*
• Less than half of organizations (46%) indicate that accountability for the success of their digital ambitions is owned by all leadership^*
• 38% of respondents say their senior leaders are effective at using new technologies and non-employee talent to change the way work is done^*

• Two fifths of organizations (41%) are recognizing that new requirements for work require a hybrid model for rewards and pay
• More than half (34%) of employers are providing additional benefits to promote workplace flexibility (e.g., backup daycare, subsidies for daycare or virtual learning).
• Most organizations agree that their retirement and financial wellbeing (61%) and health and wellbeing programs (47%) provide the security necessary to support workers to a great or very great extent.
• However, almost a quarter of organizations say that retirement and financial wellbeing programs (24%) and health and wellbeing programs (41%) need to change to provide the security necessary to support workers in a more agile and flexible workplace in the future.

Footnotes

^* Percentages indicate “to a great or very great extent.”

^** Percentages for organizational and manager effectiveness indicate “to a great or very great extent.”