British Airways has overhauled its approach to pay and benefits after identifying a gap between pay perception and total reward value.
It launched a financial empowerment strategy to help employees see the full picture of their pay, benefits and wellbeing.
Speaking at the Benefits Expert Summit, British Airways senior reward professional Bhavik Radia noted that while “total reward” isn’t a new concept, it is new for British Airways.
He said that the initiative emerged after BA discovered a disconnect between what employees felt they were getting and what the company was actually providing through pay, pensions and benefits.
He said: “As a business, we spend £3.3 billion a year on our people. So when someone says, ‘I need more money,’ there’s a clear mismatch between what people think and what’s actually being offered. There’s a misunderstanding and that’s where we saw the opportunity.
“We needed to understand what people’s concerns really were. Everyone was saying, ‘I want more money.’ Everyone wants more money, but people want money that fights inflation or helps with the cost of living, and we fully appreciate that doesn’t always happen.”
Radia highlighted that many people in the company didn’t understand the full value of their reward package or how to use benefits tax-efficiently.
He noted: “We looked at exit surveys, engagement surveys and benefits surveys. A lot of people were citing pay. They weren’t talking about total pay, they just kept saying, ‘My pay isn’t enough.’ They weren’t adding the whole reward together. In the UK especially, we found confusion, where benefits varied widely between companies.
“We wanted to unlock potential on our return on people investment by supporting colleagues through engagement and education, around their finances and their total reward package, and to move away from this concept of ‘my pay is only my base pay.’ Your pay is not only your base pay; it’s your payments, benefits and everything else that adds up to your total reward.”
BA launched a three-phase global programme focused on engagement, education and empowerment to close that gap. According to Radia, BA ran global sessions to help people understand their pay, tax, pensions and benefits in simple, practical terms. It worked to unlock more value, cutting pension fees by 35%, allowing staff to change benefits every month and offering tools like a free mortgage broker to help people save money. BA also used AI and personalised tools to make benefits easier to understand, including short videos showing each employee the total value of their pay, benefits and rewards.
Radia said the programme has already reached over 5,000 employees, with 27% higher financial confidence, 98% pension participation and over £1.5m a year saved in pension fees.
He added: “We promised the business we wouldn’t unlock value by asking people to pay more. Instead, we negotiated better rates, a 35 per cent reduction in our pension fee, which means more money in our people’s pockets. We also introduced monthly benefits access and a free digital mortgage broker to help people save money on interest rates.”
According to Radia, BA aims to embed financial empowerment as a cultural norm, helping people not just earn well but also understand, appreciate and make the most of their total reward.
