There’s a lot going on in the world of compensation and benefits. We’ve seen some long-anticipated trends materialise, including the need for more flexible work arrangements and stronger health and wellness programs, to name a few. We expect to see these themes, along with a few others, continue as we move into the Fourth Industrial Revolution, a period that has launched many deep and thoughtful conversations on thriving in a world that’s rapidly becoming more reliant on digital technology.
Here are some of the key themes we’re seeing so far:
Technology is enabling more and more professionals to change their mindsets about giving up full-time employment for contract-based opportunities that offer greater control over their time, growth, education and job security. This trend is largely being driven by people with bulkier resumes and longer tenures, and is especially prevalent among those working in STEM (science, technology, engineering and mathematics) industries. The job market is filling up with new and exciting endeavours; however, there’s a limited supply of qualified professionals to meet current demand.
Managing employees who may be around for only 6-12 months will require a creative and systematic approach to crafting fair pay and benefits arrangements that will attract, motivate, and protect them. Note that a majority of these employees will be in life stages in which time for family and personal growth will take priority. Even so, their contributions can be vast and game-changing for your organisation.
Engaging contingent workers can reduce overhead costs, especially for tax and infrastructure expenses. Their valuable experiences and insights can introduce much-needed diversity, dynamism, and agility to your business, and provide cost-effective learning and innovation initiatives. Moreover, they could become ambassadors for the culture and brand, which can boost your organisation’s reputation and staffing objectives.
Technology gives compensation professionals increased opportunities to strategize further and determine timely solutions
The concept of having greater flexibility in the workplace has been brewing for a long time, but the administrative demands for implementing custom arrangements were always a minefield. Nowadays, however, with the world changing at a breakneck speed, organisations have to be ever more robust.
A mere ten years ago, digital spreadsheets and automated charts were all it took to enable pay strategies. Now there are powerful compensation software products to help perform this task. These products can not only implement flexible arrangements, but more importantly, integrate seamlessly between systems and processes to enable linkages between job levelling, market benchmarking and compensation analytics. This gives compensation professionals increased opportunities to strategize further and determine timely solutions that bring more value to the organization, all without having to spend countless hours of manual administration.
Hybrid roles, many of which didn’t exist five to 10 years ago, will continue to evolve. Getting pay right for these positions will require an overhaul of the traditional compensation mindset.
Professionals have previously been content to take their salary and expect an across-the-board approach to pay increases and rewards. But as flexibility in the workplace becomes the norm, employees will want their compensation and benefits packages to become more personalised.
Organisations will see analytics that strongly recommend actions to maximise on human capital and will want to consider things such as adopting skills-based performance evaluations; customising pay and benefits to address the employee’s life stage and personal needs; and creating alternative paths to career growth.
It will be worthwhile to revisit your Employee Value Proposition (EVP) and consider creating customised rewards programmes for key talent. Supplementing analytics with employee insights could steer your EVP towards a more meaningful goal for your business and workforce.
Health and wellness
While rapid technological advancements have helped to streamline systems and processes, they have also made the global marketplace even more competitive and demanding. According to our 2016 Staying@Work Survey, over 50% of employees say their jobs are a primary source of stress, especially in companies where there is less regard or prioritisation of personal safety, health and wellbeing. Numerous studies have linked workplace stress with various medical conditions, including cardiovascular disease, obesity, diabetes, hypertension, certain types of cancer and mental health issues.
Still, many employers view health and wellness as an individual responsibility, preferring to stick with mostly hands-off approaches like providing medical insurance, sick leave and occasional off-site activities.
There is evidence that management-led health and wellness programmes that are thoughtfully planned and coordinated result in a happier and healthier workplace Successful health and productivity strategies have resulted in 6.5 fewer missed work days, higher engagement, a significant reduction in employees with hypertension and high blood sugar (25% and 24%, respectively), and 50% higher revenue per employee, among many other benefits.
Pay and transparency
Base salary continues to be the number one driver of attraction and retention for employees in Asia Pacific. It’s as crucial as ever to not only get your compensation right, but to ensure you’re communicating openly and honestly about it to your workforce. People know that performance evaluation is a two-way street; and the question of how can you contribute to our bottom line applies to both the employer’s business objectives and the employee’s personal needs.
What factors are considered when determining pay? Is compensation benchmarked against similar roles and skillsets in the market? How is the company doing financially? Can your organisation afford to offer salary increases next year?
Organisations that stick with the old rhetoric of only equating salary to the job and performance rating risk causing confusion for their employees and may appear more unfair or untrustworthy. Employees are more likely to trust and engage with employers who openly communicate and explain their compensation and benefits decisions.