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Autumn Budget 2024: 4 Ways HR Strategies Can Drive Authentic Engagement

A shift from productivity-driven approaches to authentic engagement is gaining momentum from employers, magnified further since the 2024 Autumn Budget announcement. But how can HR leaders effectively champion this transition as they plan their People strategy for 2025 and beyond?

2024 Autumn Budget: Recap of the key takeaways for HR, Rewards and Benefits leaders.

1. National Insurance increase: Employers now face a 1.2% increase in National Insurance tax alongside a lower salary threshold which for many will have significant impact on workforce costs. Whilst a small proportion of organisations will benefit from the enhanced Employment Allowance (rising from £5,000 to £10,500), the majority of employers are likely to slow workforce growth and implement hiring pauses as they begin to absorb these, meaning morale, engagement and productivity from existing teams is likely to fall, particularly as many are already overstretched.

2. National Minimum and Living wage hike: The UK’s legal minimum wage will rise by 16.3% for 18-20 year olds and 6.7% for over 21s presenting another significant cost to employers, heightened more so for businesses in frontline or ‘deskless’ industries who typically have younger majority workforces. On top of existing staff shortages and the possibility of hiring freezes, pay increases for wider demographics of the workforce will likely unfeasible for many businesses, leading to higher disengagement and turnover rates.

3. No freeze continuation on employee tax thresholds: With no extended freeze on income tax thresholds, more employees will likely face the negative financial impact of unchanging tax bands against the rate of inflation and rising cost of living. And, with across-the-board pay rises unlikely for many, employees’ disposable income is further limited and as a result will influence their engagement, productivity and loyalty to their business.

4. Health and social care funding increase: Boosted investment in the NHS to better support critical health services has placed employers’ own role in how they champion the wellbeing of their workforce under the spotlight. Comprehensive health and wellbeing rewards and benefits are increasingly becoming a non-negotiable for many employees who face increasing workloads with limited compensation.

Shaping a post-Budget strategy: 4 ways employers can drive authentic engagement.

In 2025 and beyond, employers must shift their People approaches from productivity-driven strategies to authentic engagement if they want to meaningfully empower, maximise and retain their teams. So, what does this look like?

1. Purpose-led communication.

Now more than ever, employees need to feel informed of their business’ decisions and direction. Clear and consistent internal communications are fundamental – and importantly, this should keep the organisation’s core values and purpose at its core to ensure teams are not only kept in the loop around future planning, but feel connected to and trust their company’s mission and core purpose.

In times of change, this transparency is essential and employers need to lean on opportunities from team meetings and town halls to Q&A sessions and internal digital platforms to emphasise the ‘why’ and ‘how’ behind any organisational shifts. By prioritising two-way feedback loops (and actively demonstrating employees’ feedback is acknowledged and actioned where possible), employers can ensure their people feel seen, heard and valued as they navigate their next steps.

2. Meaningful wellbeing support.

Of course, investing in comprehensive wellbeing strategies is key to championing authentic engagement-led strategies. However, this often remains overlooked with 41% of employees reporting they don’t feel their employer cares about their wellbeing.

But, with increasing financial pressure now upon businesses, this is a blindspot that can no longer be ignored. In a market where consistent salary increases or headcount expansion is unfeasible for the majority, employers need to adopt alternative approaches to extend their existing compensation packages and meaningfully champion each pillar of their employees’ wellbeing. And since the Budget announcement, we’re already seeing investment in benefits and rewards rise.

Our latest blog explores a tangible example of how employers can strategically lean on benefits such as salary sacrifice to meaningfully empower employee wellbeing whilst offsetting tax increases ahead of 2025.

3. Real recognition and reward.

Authentic engagement strategies will now be built upon prioritising a real culture of recognition and reward, to ensure employees feel valued for their contributions and that they truly matter to the business.

But, this shouldn’t stop at exceeded role KPIs or targets – recognition should ensure the great things happening every day are acknowledged – from the small wins to the big achievements. Importantly, employees need visibility of others’ achievements to champion connection and belonging in times of change. This also in turn incentivises more great things to happen. An employee recognition platform can centralise multi-level and personalised recognitions, celebrating milestones and hosting internal award schemes. Explore 14 powerful examples of employee recognition here.

When it comes to employee reward, a clear and tangible strategy can elevate recognition and inspire engagement at all levels. Tailored rewards can include traditional monetary options, or leverage non-monetary perks such as additional time off or retail vouchers, to empower managers to celebrate key moments despite a challenging climate.

4. Dynamic feedback.

Amplifying voices at every level is crucial to authentic engagement strategies. When employees feel heard in their experience, challenges and ideas, this paves the way to boost engagement and innovation across the business. Regular feedback loops are key to this. And feedback doesn’t have to rely on quarterly, long-form engagement surveys – it should range from regular temperature checks, to a dedicated space for new ideas, alongside deep dive sessions for teams to share any existing barriers as well as current aspirations for their role.

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