A demographic analysis of employee reward preferences: A post-Covid-19 overview

Abstract

Orientation: Firms globally and in South Africa have been struggling to attract and retain employees since the outbreak of the COVID-19 pandemic, with resignations and pronounced skills shortages challenging talent management strategies more than ever. While researchers have attempted to keep abreast of employees’ total reward preferences due to the impact of rewards on attraction, engagement, and retention, the research outcomes have been inconsistent regarding individual effects, particularly demographics, on reward preferences and how these influence employee attraction and retention, particularly in a post-pandemic world. Research purpose: The primary aim of the research was to explore the relationship between employee demographics and reward preferences in South Africa, focusing on the impact of the COVID-19 pandemic on employee attraction and retention. Motivation for the study: In the global war for talent, understanding the nuanced reward preferences of employees with different demographic distinctions enables organisations to tailor reward preferences to maximise employee attraction and retention, which provide firms with a competitive advantage, ultimately impacting organisational performance. Research design, approach, and method: The research was a cross-sectional, quantitative, empirical, descripto-explanatory study of reward preferences of employees in a South African fast-moving consumer goods (FMCG) organisation. A self-administered online survey was disseminated to 321 potential respondents, and a final research sample of 182 respondents was obtained. The responses were inferentially analysed using factor analyses, tests for differences (t-test, analysis of variance, Kruskal-Wallis) and a two-step cluster analysis. The results were compared with a similar study, that of Fobian and Maloa (2020), conducted pre-COVID-19. Main findings: The study confirmed differences in reward preferences between demographic groups and isolated the most prominent demographic variables, including seniority, tenure, and generation. The study confirms the importance of financial compensation for attraction and retention but highlights that firms need to differentiate themselves through non-monetary rewards. The importance of development post-pandemic is prominent and provides insight into employees’ potential search for purpose in this work context. Practical implications: Understanding the influence of demographic variables on reward preferences enables organisations to tailor reward strategies to maximise attraction and retention in a skills-scarce context. Organisations can use the preferences identified in this study to redesign their reward strategies accordingly. Contribution: The research enhances the existing body of knowledge regarding reward preferences and talent management, especially post-pandemic. The identification of a potential shift in preferences and the differences between demographic groups enables organisations to tailor their reward strategies in order to improve attraction and retention