United Kingdom


  • Service: Advisory, Management Consulting, Insights, P3
  • Type: Business and industry issue, Publication series
  • Date: 01/07/2013

A disappointing future for reward 

A disappointing future for reward

I’m sure I’m not alone in recalling how I entered the work market with an unswerving, ingrained belief that hard work brought rewards and that reward equated to status.

My generation – and the one immediately behind it – was brought up to work harder, longer, faster and to always aspire to climbing the next rung on the ladder.

I think that more recent entrants to the workforce are now bringing with them different beliefs, predicated on how much reward is actually ‘enough’.

This leads me to believe that the workforce of the future – in developed markets at least – will be characterised by a far more unequal distribution of reward than has ever been the case previously.

'Enough' reward

Three factors lead me to believe this; the concept of ‘enough’ reward, the continued automation of the unskilled job pool and the requirement of senior leadership to imbue an organisation with the ethos and charisma which will be essential in the talent wars of the future.

Starting with this concept of enough reward, there will always be those individuals for whom working to 120 percent of their capacity will not faze them; so long as they are suitably rewarded above and beyond the mean.

But I think there will be an increasingly large proportion of the workforce for whom any incremental reward increase above and beyond what they deem to be enough to sustain their lifestyle will hold precious little appeal.

These are the people for whom the work – life balance is everything and who adjust their salary expectations accordingly. Unlike my generation, they will not equate salary to personal worth or value and they will definitely not consider being in the upper reaches of a salary league table as anything to be proud of.


The virtual workforce

What members of older generations may perceive – disparagingly – as a lack of ambition may actually be indicative of individuals declaring that they are just fine where they are.

There will likely still be talented people though; workers that employers will be keen to have on their payroll. Yet they will not be motivated by reward to the extent that my peers may have been.

The workforce of the future will likely look very different to what it is now. Organisations will become more dispersed – with fewer core employees but a larger, virtual, networked workforce.

You can see the first signs of this already in some of the more cerebral industry sectors such as IT or business services. Others will follow in time, with the heavy manufacturing industries – which still require a high degree of manual, shop floor, intervention – likely to be the last to adopt such a structure.


Corporate charisma

The challenge of maintaining such a networked workforce will be significant – especially when you bear in mind that the afore-mentioned pool of ‘enough reward’ workers will not be swayed by basic remuneration incentives.

This will then be the catalyst for the emergence of a new breed of senior leaders who can paint the picture of corporate values and purpose which, I believe, will prove far more attractive to such a workforce than money.

Such leaders, who realise that corporate charisma will be just as important as a smart business idea, are currently rare. For these people though, who will enthuse the best talent to want to come and work for them, the rewards on offer will be phenomenal.

This job of constantly painting an attractive, values-driven picture will be exhausting and highly specialised. It will also be at the mercy of external, societal factors. What makes one company’s ethos attractive may be flavour of the month today but could be a millstone round its neck just two years later.


Pop-up organisations

For both these reasons, it is difficult to foresee this sort of effort being maintained beyond the job lifespan of one of these super-talented individuals. In fact, it rather validates the growing popularity of pop-up organisations as the temporary nature of such structures is better aligned to an environment where the attractiveness of employers shifts in real time, in line with public sentiment.

For those organisations that can navigate through this, the rewards for the super-charismatic leader, the other members of the nano-corporate core and a select few in the wider network, will be significant.

Place that alongside the growing battalion of ‘enough reward’ workers and the argument for the emergence of a more unequal distribution of reward becomes clear. Furthermore though, I think this will be exacerbated by the growing number of individuals who risk being locked out of the workforce altogether.

The automation of unskilled labour is clearly the major factor here. As the battle for talent rages ever fiercer in the top end of the skilled labour market, I fear we shall see an increasingly large swathe of the population who will have neither the skills or the talent to compete – or even to be of interest to most employers.


Widening pay gap

Such a trend would further exacerbate the reward gap and would likely lead to tensions between those with money and those who appear permanently unemployed (or unemployable).

Now, the shifting moral compass of the ‘enough reward’ camp could feasibly lead to a situation where those with money altruistically do more to assist those without it. Pressure could be brought to bear – just as it is on the banking sector now – to determine what is an acceptable level of reward; with anything above and beyond that going to help those less fortunate.

I suppose that could happen – but even with pay moderated to some degree, I expect to see the gap between the haves and the have-nots in the workforce widening in the not-too-distant future.


David Fairs is a Pensions Parner at KPMG in the UK

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David FairsDavid Fairs


KPMG in the UK


020 7311 3103

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