If a company isinterested in productive, committed, inspired employees, the onlyway to achieve that is through an integrated Total Rewards program.(Image: Shutterstock)

According to a recent WorldatWork study on financial well-beingconducted at the end of 2019 in partnership with Computershare,life events (39 percent), rising health care costs(34 percent) and personal debt (22 percent) wereidentified as leading stressors in the workplace. In a tight laborforce where retaining key talent is crucial, Total Rewards leaderswill be challenged to align their employee experience with what theworkforce expects and needs.

Related: 5 trends in workforce management toexpect this year

It is also time to find much more effective solutions on pay forperformance programs. A study by Mercer shows the mountain they'll needto climb to meet it: it found that only 2 percent ofcompanies believe their performance process delivers high value andfewer than 3 percent believe they have excellent feedbackpractices. Here are six trends that will drive change in 2020:

1. Pivot to become chief reskilling officers.

This will be HR's biggest challenge of 2020. We essentially havetwo massive buckets of workers in the US: Routine/lower paid (i.e.fast food, receptionists, data analysts) and unique skilled/higherpaid, but not much in the middle. As routine tasks/jobs becomeobsolete, it's HR's responsibility to lead the way in reskilling workers and to influence colleaguesin hiring, finance, training/development to more rapidly respond tothe ever-growing skill gaps. The proverbial train has already leftthe station and we are already behind. Total rewards and HRprofessionals must lead the way to solve for reskilling by engagingtheir own organization with a level of urgency that has yet to bedemonstrated.

2. Most direct path to optimal performance is through totalrewards

HR leaders must innovate and reduce their intense focus on"employment." The traditional focus of HR on compliance, policies,processing forms, and oversight of performance processes must end.Every HR person must shift their focus to shaping how and why theirpeople work—and that, is all about Total Rewards. Creating a newemployee experience linked directly to the brand experience willultimately add the most value to an organization.

HR needs to understand that their corporate/brand promise (howgood of an organization they are to their community or to the worldthey are serving) is now on par with going after profits. Thisactually gives HR a new entry point into influencing leadership. Infact, it may be the biggest opportunity for an HR moment that wehave ever had. We don't like to admit this, but not all HRfunctions deliver the same amount of value to individuals, teamsand the organization. Total Rewards (compensation, well-being,benefits, development and recognition) are the premiums. If acompany is interested in productive, committed, inspired employees,the only way to achieve that is through an integrated Total Rewardsprogram. People need to care about the work they are doing, andthey need to know you care about them.

3. More human, less employee

Workplace flexibility is no longer a reward: it's a mandate. Wewon't see the traditional 9 to 5 schedule completelydisappear, but you will see that mentality dismantled. Managers whofocus on the clock (who is on time and who leaves early) willcontinue to decline in importance. The emerging on-demand modelwill allow people to figure out how they can do their work at thetime and place when they can be most effective. Even inmanufacturing, there will be a demand to look at different ways toget products made, whether that means different shifts, 3 or 4-daywork weeks, or any number of options.

Whole-person thinking moves the equation from an employmentfocus to a human focus, making it a big win for human engagement.People are willing to give more when they have permission to bethemselves and this trend is going from nice-to-have to must-have.Focusing on employees is fine, but "fine" won't get you to awesome,and that is where the growth, innovation, and high performancesits.

4. All about choice: Health plan deductibles will decrease

Policies and benefit programs that were designed for the masses(like HDHP) rather than to meet individual needs will continue tobe dismantled. This trend will continue because as talent becomestighter and unique skills harder to find, the needs of people arebecoming more important. A premium will be placed on employers whotake the extra step to understand what their people need and thendeliver it.

Employers will move toward more choice and more plan optionsincluding telemedicine, partnering with health clinics, creatingon-site options, all with the goal of meeting the broader needs ofindividual employees. According to WorldatWork's FinancialWell-Being Study, HSAs (Health Savings Accounts) programs are beingoffered by 73 percent of companies surveyed. Programs likethis give more choices and higher value to employees since thefunds, if not used, roll into an investment account for use laterin life.

5. Standing for something: focus on corporate conscience andbusiness purpose

The Gen Z and millennial workforce (which now comprises thelargest number of workers in the US) wants to align work withsomething important to them. They bring withthem higher expectations of doing the right thing and it's alllinked to their beliefs and what they find important. And, at thesame time, they will want to know what is important to you, as apotential employer. They won't want to compromise their own valuesfor the sake of a bonus or profit of an organization. They areasking questions when evaluating a potential employer such as: "Howgood of a corporate citizen are you? Do you have women in theC-Suite or an identified path for people of color? Do you have corevalues that stick as an organization? Do you provide compensationfor being a good person (i.e. providing bonuses for time given backto the community)? Does that show up in your Total Rewardsprogram?"

They look at Return on Promises (ROP) rather than ROI. Companiesthat take on social issues and focus on conscious business andpurpose instead of just shareholder value and profit willexperience the strongest financial performance. Perceived greedycorporations in 2020 and beyond will be outliers.

6. More bonuses to more people

Variable pay will play a bigger role in getting money to morepeople and validate them more frequently. We will see broaderinclusion of bonus programs based on new paradigms (speed upoutput, think more creatively, challenging the status quo). There'sa growing need to access more cash at specific life points. Forexample, those in midlife may be buying homes, cars, paying forcollege, etc.

Compensation needs to be modeled for life rather than on astandard monthly schedule. As a result, companies will have tooutwit competition in compensation programs in ways they never hadto before. As an example, Uber dominated the car service businessin Singapore up until Grab entered the market and gave theiremployees access to daily cash via a bank card (speed and directlinkage to output that day) and thereby crushed Uber.

The mandate for HR professionals in the new decade is anexciting one: keep the focus on the people and the work. Today,human capital remains the biggest asset for most companies. Withthe focus on the human, not just the employee, the profits willfollow.

Dr. Scott Cawood ispresident and CEO, WorldatWork, a nonprofit professional association incompensation and total rewards. We serve those who design anddeliver total rewards programs to build productive, committed, andinspired people that work. Founded in the United States in 1955,today WorldatWork serves total rewards and HR professionalsthroughout the world.

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