The workforce is changing. Emerging skill sets, multiple generations in the workforce, the increase of "gig" workers/contractors, and rapid advancements in technology are creating a very different workplace. Employee expectations are also changing with flexibility, wellness, and development opportunities all ranking high in importance. To continue attracting top talent, employers must think beyond traditional rewards to differentiate themselves and define an employee experience that will make the right talent want to join, stay, and deliver their best performance. Even as the workplace evolves and expectations change, there is one thing that remains constant: compensation is the foundation that everything else is built upon.
When surveyed as part of Mercer's Global Talent Trends report1, a diverse population of employees said that "compensation" was the number one way in which they are positively impacted at work. This suggests that creating a compelling employee value proposition starts with the traditional, contractual elements - specifically, elements related to competitive compensation practices. Said another way, you have to get the foundation right: a company needs to establish a solid rewards package consisting of competitive compensation and benefits.
Employees said that "compensation" was the number one way in which they are positively impacted at work.
This research also shows that the average employee spends around 10 hours a month worrying about money while at work. In response to these ongoing trends, more tailorable compensation offerings have become an integral part of the workforce's shifting value proposition. In the future, this shift is also expected to include a bigger emphasis on transparency, personalization, and flexibility, as well.
Transparency in Compensation
Naturally, employees want assurance that they're being paid fairly, and they also want to know that they're receiving recognition for their contributions. And, thanks to technological advancements and the rise in online discussion forums, many employees now have access to data and other insights that let them access crowd- sourced data that suggests the value of their jobs. For organizations, this means they not only have to differentiate themselves from competitors, but they have to provide transparency around their employee pay practices.
The importance of salary benchmarking is greater than ever in this environment of transparency. Studying the market can reveal pay inequities, trends in salary movement, and emerging hot jobs, providing the insights an organization needs to stay competitive. To do this, many organizations rely on salary surveys to gauge the attractiveness of their pay packages by comparing them to their competitors and to the market. These comparisons can be broken down by geographical location, industry, company size, and so on, for greater precision and effectiveness. A strategy backed by market data allows an organization to ensure competitiveness in this more transparent environment.
Going Beyond Compensation
Though standard salary calculations continue to empower HR professionals, total rewards packages are also becoming more open to personalization. In many instances, personalized compensation packages have already become common in the modern workplace, providing employees with many more options than previous generations had. Total rewards personalization can come in many forms, including:
- Customizable retirement plans and 401(k) matching contributions
- Flexible PTO policies
- Varying levels of employer-paid premiums for health, life, and disability insurance
Personalization is not possible, though, without increased employer flexibility, particularly when it comes to adaptation. For example, in the US, 90% of surveyed organizations said they have introduced (65%) or are considering introducing (25%) a flexible start/leave program, per the US Compensation Policies & Practices Survey. The same survey also revealed that 88% of surveyed organizations have already introduced (52%) or are considering introducing (36%) programs that allow employees to liberally work from home.
Despite the increasingly diverse selection of new perks and benefits that are being demanded by today's professionals and offered by organizations, it's important to remember that a solid foundation is key. It is imperative that you get compensation right and then build from there to differentiate your organization in order to attract the best and brightest. Learn how compensation data can help you establish the foundation for an attractive and unique employee value proposition.
1 Mercer, Global Talent Trends Study, 2017.