Article: How total rewards strategy will be shaped in 2020

#Outlook2020

How total rewards strategy will be shaped in 2020

With the nature of businesses getting more complicated each day, we take a look at how companies redefining their total reward programs to better suit their needs.
How total rewards strategy will be shaped in 2020

The gamut of total rewards has expanded considerably over the years, making it an important consideration of HR professionals. Reflecting on the nature of candidate preferences, building the rights rewards and recognition mechanism remains a highly relevant means to retain and accelerate talent within companies. HR professionals are aware of this role that total rewards can play and often create reward systems that in tune with what their employees demand.

But to truly leverage the potential benefits of having a robust and well-tuned rewards systems in a company, HR professionals need to look at how candidate preferences are evolving and match their rewards and recognition program that manages both, the expectations of the employee and demands of the company. Today HR professionals have a large basket of options to choose from when it comes to designing the right rewards program for their employees. But a large number of options to choose from brings with it its own set of problems. Problems that require careful attention to be avoided while a total rewards program is designed.

The coming year would further increase the complexity of rewards programs. In a world of increasingly advanced technologies, where the nature of work changes with great frequency, traditional approaches to filling jobs internally are slowly giving way to more systematic and decentralized approaches to matching talent to work and work to talent. But as such programs get more nuanced, the companies require the right rewards structure to ensure the right talent is hired and retained by the company. Skill changes further complicate the matter as people with proficiency over niche skills become vital to companies. It is in such market conditions that HR professionals find themselves in currently.

Rise of data-driven decision making

Data-driven decision making has already become a mainstay across organizations, with business processes today heavily depending on data to draw valuable insights. When it comes to people data, HR professionals need to be adept at providing the rest of the organization with data that does more than simply explain what’s already happened — it must tell its leaders who within the organization may be thinking of leaving, who’s joining and why, and why one team is experiencing performance failures while another is thriving. Moving into the new year, it's imperative that a similar use of data is replicated when it comes to implementing a rewards program. As retaining and rewarding qualified talent becomes more important, 2020 would see more companies leverage tech like AI and big data analytics to assess performance better and design rewards programs accordingly

Larger picture: Impact on EVP

Companies today realize that the importance of their value propositions to their employees and therefore have begun keeping a careful track of how their total rewards program helps build into the larger theme of retaining and promoting the right talent. They also have the option of designing their rewards programs to offer their employees a unique value proposition to offer employees and can tweak components like compensation and benefits to better suit such propositions. While some have the option of emphasizing flexibility by giving people choices about what benefits they receive others can today define their EVP by emphasizing pay fairness or offering rich benefits, like extended maternity leave or generous paternity leaves, that go well-beyond statutory mandates. The coming year would prove vital in how companies break free of traditional models of total rewards and offer their employees a more suitable EVP.

Growth of team performance assessment

Compensation and benefits often have a key linkage with how performance assessment is conducted within the company. While traditionally, the idea behind such assessments has always been to ascertain individual performance. A recent PWC survey highlighted that teamwork is also becoming a more important consideration for companies to monitor. Over 63 percent of respondents in their survey highlighted that team performance will increase in importance while 41 percent noted that the importance of individual performance will decrease or stay the same. This is reflective of how often the diverse nature of modern-day work requires a better and holistic way of assessing performance and implementing a total rewards program.

Addressing challenges of the future

It’s about paying people for their skills and doing so as objectively as possible. Skills, especially in a world where the business landscape is changing rapidly, are the ‘new oil’ of the digital age. And for companies, finding ways to quickly acquire and retain talent with the right skills at the right time is one of the top priorities today. But to be able to do so successfully, rewards programs today need to cater not only to demand of the current workforce but should be open enough to reflect the need for tomorrow.

Topics: #Outlook2020, Benefits & Rewards

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