There are a lot of terms that are being used to describe the current pandemic – The Big reset and The New Normal. And the wellbeing of our employees and organizations is in sharp focus. This time has given HR teams a chance to review, refresh and redirect a number of their initiatives. On Day two of TechHR Singapore 2020, Puneet Swani, Senior Partner and Career Business Leader, International Region, Mercer spoke about how the Compensation and Benefits function (C&B) is set to change.
“The rewards function needs to urgently align itself as companies build up their efforts for tomorrow, says Puneet. There is a renewed attention on skills, gig economy, contractors – but there is also a need to reflect on how we’re going to rewards this talent? Here are some takeaways from his session:
There’s less focus on jobs and a greater focus on skills, and there are pressures to adapt and innovate. Employees are applying their skills differently, by applying their talent to multiple project based settings.
The quality of life has come into a sharp focus during this pandemic. People want to be rewarded for their contribution, but they want personalized rewards. There’s also a greater focus on team performance.
AI & Automation
The use of AI and automation to understand what engages and disengages employees is going to continue. It also helps model budgets and it is driving budgets from a rewards perspective.
Here’s the fundamental change in how C&B is being delivered:
Shift from technical to business
C&B, for long, was considered to be a technical function, but its now time for the function to speak the language of the business. What is the business’ focus on talent? What is the strategy around long term retention? And how can C&B play a role in that, rather than a technical focused language?
From benchmarking to analytics
Lag models like benchmarking data relies on older figures that are normally six months or a year old. It’s time for the C&B function to move away from benchmarking strategies towards analytics and AI that’s focused on future predictive models. It also helps the function figure out scenarios that they may just be planning for. Ex: What will happen when I change portions of variable pay?
The shift from jobs to skills is also representative of the shift to understanding where and how value is being created. And how such value is aligned to compensation and benefits.
From standardized to personalized
Understanding how C&B can be aligned to individual lifestyles, preferences rather than standard options will be critical to the future. Personalization of rewards pushes the organization to think about rewards from an individual’s perspective and not from a generational/ gendered cohort prism.
Transactional to strategic
A lot of the time of C&B professionals was spent on assessing market pricing, administering ay processes, establishing or adjusting pay bands etc., That will change over time as predictive modelling takes over with the help AI based tools. The new role of C&B professionals will be focused on manager training and aligning more closely to the business.
Even as the focus on becoming more agile and empowered takes over delegated responsibility, there’s also greater focus on becoming more fair and transparent. As intelligent rewards systems shape the future of the function, there’s also a need to build a culture of trust.