Top 5 topics US HR pros should be talking about for 2021

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January 06, 2021

In a world that still contains a great degree of uncertainty, planning for the next 12 months feels harder than normal. What should you be planning for in 2021?

We asked several Mercer consultants what they see as priorities for human resources (HR) professionals in 2021 and here’s what they said.

1. It’s about more than base pay

Though we’re never going to say, “base pay doesn’t matter, worry about other things,” getting base pay right should be something that is sort of on autopilot. You should have a well-run process in place that allows you to understand what the market is paying for your jobs, assesses your competitiveness and then allows you to position your compensation plan accordingly. (If not, start there, please.)

Today, what we’re finding is that not only are employees asking for more, but employers are responding with new ways to reward employees. Rather than the small merit increases we’ve tried to make work for the last decade, more and more employers are using short- or long-term incentives to reward employees. It makes sense, right? If an employee performs really well this year, give them a good bonus. Not so great the next year, then you give them a lower bonus … or no bonus at all. The variable nature of incentives creates a much clearer connection between pay and rewards than adding a small percentage to base pay, which can only be adjusted upward.

Another thing to consider is the fact that many employees will not be returning to the workplace in 2021. All of the benefits (concrete or intrinsic) that were provided physically to employees have been taken off the table. Employers need to consider how to provide benefits, such as good technology and communication tools, to employees who are working remotely. In some cases, employers are providing reimbursements or stipends, while others are choosing to supply office products directly to employees. Have you looked at your compensation policies and practices lately to ensure they can accommodate the new shape of work? It’s probably time.

2. Diversity, equity and inclusion is more than just a metric to track

Now more than ever, employers need to be closing the “say/do” gap and putting into action their well-meaning diversity, equity and inclusion (DEI) statements. The unrest and challenges of 2020 exposed a great disparity in terms of how we treat people in the world, and the opportunities we provide them, based on things that are beyond their control (such as, race, gender and age).

Many companies understood the importance of speaking out publicly on their commitment to have a DEI workplace. But what actions, programs and policies did they put into place to ensure they were actually doing what they were saying they would? According to a survey1 Mercer conducted earlier this year, 81% of global companies indicated that they were focused on improving diversity and inclusion.

1Mercer. When Women Thrive 2020 Global Report: Let’s Get Real About Equality, 2020

However, when we asked that same group whether they had a documented, multiyear diversity and inclusion strategy, only 42% indicated that they do. That seems to be pretty good evidence that many organizations are ‟talking the talk,” but not necessarily ‟walking the walk.”

3. Flexibility where it counts

As you know, the pandemic in 2020 forced many companies to embrace remote working and flexible schedules at a much more rapid pace than we expected. Companies, and HR in particular, have been impressed and satisfied with the improvements in productivity as well as their employees’ resiliency and ability to innovate.

navigating the journey to pay transparency image

However, there are still some who are resistant to the idea of flexible work. Possibly that is because when we think of flexible work, we tend to think of a flexible schedule or maybe even flexibility with work location. But flexibility related to work and jobs goes far beyond those two dimensions. With the right framework, you can create policies and practices, as well as pay programs, that will support the optimal level of flexibility for the types of jobs you have in your organization.

4. Secure your hourly workforce

With demand for hourly workers high due to the continued growth of giants like Amazon and other online retailers, understanding your labor market competitors is critical. It will be difficult to find and keep the employees you need if you are paying too little, but you certainly don’t want to overpay either.

Though skills are being emphasized across the board, the skills a person possesses in an hourly role has always been more important than their prior experience. When looking for a housekeeper, a hotel is not just going to consider people with prior housekeeping experience, but those with the right skills, such as a good work ethic, the physical abilities and organization. That means they could be competing for those potential candidates with local restaurants, hospitals, warehouses and even call centers. Understanding your local labor market and having the right data is critical to attracting, retaining and motivating your hourly employees.

5. Listen to your employees, find out what matters to them

Do you know how your employees feel or what they really want or value? When it comes to important topics, employers are listening to their employees to see what really matters to them. By implementing cost-effective, efficient employee pulsing tools, employers can get a much better grasp on what really matters. Have an important segment of the population that are baby boomers? They might be more concerned about retirement planning. Big pet-loving population? Well, then how can you make that pet insurance work harder for them?

These, of course, are just examples. What you need to focus on will depend on your unique employee population. Just ask them, you might be surprised by what they’d like to see in terms of rewards. After spending so much time with our families, with a slower pace of life, it’s likely that many of us have reconsidered what’s really important. Where does your organization stand on each of these priorities? What are the greatest opportunities for improvement that will impact your organization in 2021?

If you need more help, reach out to us at surveys@mercer.com or call 866-605-1031. Let’s make 2021 a great year, together!