Nothing demonstrates a company'scommitment to its employees quite like its rewards philosophy.(Photo: Shutterstock)

|

It's no secret that the U.S. labor market is tight. At present there isless than one job-seeker per job opening in the United States—asituation that is causing organizations of all sizes to reevaluatetheir rewards strategies.

|

As the new year unfolds, organizations are facing a number ofprofound and fundamental changes. Perhaps none of these is as greatas the expectation, brought on by societal shifts, that companieswill transform from a business enterprise into a social enterprise; i.e., an organization whosemission combines revenue growth and profit-making with the need torespect and support its environment and stakeholder network. Thisseismic shift is not only impacting companies around the world, butalso changing the way candidates judge employers and employmentopportunities.

|

Related: Benefit costs less of a priority as employerscompete for talent

|

To address strong competition for talent, employers areincreasingly using their rewards offerings to differentiate theirorganizations and generate candidate interest. Employmentopportunities and advantages can seem similar, especially inestablished industries where many employers are chasing a limitednumber of talented people and the “democratization” of compensationdata has leveled the playing field between employees and employersaround knowing what a job is worth. Creative rewards programs canbe a powerful way to communicate not only how an organizationvalues its employees, but also how it pursues its mission.

|

Rewards can play another critical role. By structuring offeringscorrectly, it's possible to attract specific classes ofcandidates—those individuals who can help meet essential businessobjectives while fitting with an organization's culture, valuesystem, and way of working. Nothing demonstrates a company'scommitment to its employees quite like its rewards philosophy.

|

Given the current hiring environment, organizations are beingpushed to become more innovative than ever in how they reward andsupport their workers. Two trends in particular are changing therewards landscape—and will likely become more evident in the comingyear:

|

1. Rewards will become crucial to the employment brand.

Flexible programs can build authenticity, demonstrate empathy,reinforce workplace culture, and help organizations realizebusiness goals. Showing empathy for career and life stagechallenges, for example, can reinforce a company's reputation foremployee support while also helping to “close the deal” on idealcandidates.

|

Organizations can develop their employment brand, support theiremployees and, at the same time, further their strategic hiringobjectives through careful rewards planning. For example, a companybuilt on agility might emphasize how their frequent compensationreview cycles and flexible rewards offerings, set them apart fromorganizations with more traditional programs and cycles. Or anotherorganization, needing to attract large numbers of highly educated,early-career workers, might highlight their innovative approachesto helping employees deal with student debt.

|

2. Advanced analytics will support personalized rewards.

A second trend to watch in 2019 is how employers are collecting,combining, and interrogating more sources of data than ever beforeto better understand workers and then optimize their offerings tomeet employee needs and preferences. By mining their people data todefine various segments within their workforces, organizations candetermine the characteristics and preferences of each segment, or“persona,” using rewards optimizations surveys and other methods tocollect employee input directly from the source – employeesthemselves.

|

Personalizing rewards based on the needs of an organization'sactual workforce – rather than an industry benchmark or broader setof market data – can be a truly powerful tool to extend workerloyalty, reduce churn, and improve engagement. And while a wealthof information to inform these efforts is there for the taking, thetools that enable collecting and analyzing such data, as well asadministering actual rewards programs, are continuing to develop.As they do, perhaps it will soon be possible to go even further,implementing individualized rewards programs that are tailored toeach employee's unique circumstances.

|

High performers lead the way

High performing HR organizations are already embracing thesetrends. Bersin TM, Deloitte Consulting LLP's 2018 High-Impact TotalRewards research indicates that high performing organizations are5.6 times more likely than low performing organizations to say thattheir rewards brands reflect their organization's culture to agreat or very great extent. Moreover, these organizations areexponentially more likely to report strong alignment between theirrewards strategy and their business goals.

|

Top performing employers are using a wide variety ofchannels—internal communications, social media, job boards, HRchatbots, and recruiting collateral— to share information abouttheir rewards strategies and programs, using messaging that istailored to the environment, so employees and candidates receivewhat they need, when they need it.

|

Rewards professionals in these organizations are also working inclose partnership with their talent acquisition colleagues to sensethe market, remain aligned with candidate desires, and reinforcethe rewards/employment brand connection. Doing so can result in arewards brand that accurately represents the organization'sinternal realities, as well as the needs of the marketplace.

|

With respect to analytics, high performing organizationsare six times more likely than their low performingcounterparts to report using data and analysis to understandemployee preferences. They also use analytics to evaluate theimpact of existing rewards offerings and predict the utilization ofand return on investment for new or evolved offerings.

|

It's clear that the war for talent will not be over anytimesoon. As evidenced by the rise of the social enterprise, candidatesare expecting more from their prospective employers; they'reincreasingly seeking a relationship, rather than simply aworkplace. Rewards are evolving—and the market is demanding greaterflexibility, innovation, and personalization. Employers who embodythese traits can succeed not only in 2019, but also in the years tocome.


Read more: 


Peter DeBellis is the total rewardsresearch leader for Bersin, Deloitte Consulting LLP.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.