In order to create a proper framework that ensures the right market forces are taken into account while strategising, the People Matters Total Rewards Conclave 2017 had Shanti Naresh and Preeti Chandrashekhar from Mercer to share their views on the changing spectrum of rewards in 2017.
Shanti began the session by stating that the projected increase in annual incomes across industries would mostly be around 10 percent, a figure that has remained constant since 2014. Attributing this to the result of opposite forces, Shanti pointed out that a constant year on year increase of 10 percent can be attributed to the increasing number of jobs that companies create by the virtue of their expansion. A closer look at the interplay between the economic forces of GDP growth, inflation and their consequent result on the wage increase reveals that although inflation has been relatively falling since 2014, by virtue of rapid expansions by companies across industries has meant that more and more jobs are getting created every year.
“The other reason behind this has a relative stable growth of our GDP as well” added Shanti, “And as a result the global sentiment around increase in compensation has been quite positive for a country like India.”
The robust growth of India’s GDP has to a large effect ensured that jobs are being created, which in turn reflects a competitive compensation growth for companies to attract and retain talent. This has been able to offset the expectation of a low salary increase due to inflation. “ And the sentiment would remain quite similar moving ahead into the new year” pointed out Shanti.
Increasing the focus on benefits
Although compensation is bound to be a key attribute of a company’s Total Rewards package, Shanti explained that the scope to innovate and define industry standards are fairly less within this space.
Given a year on year trend which has remained the same, it’s difficult to innovate within the compensation space”
Preeti Chandrashekhar then took the stage to explain the need within companies to actually focus on their benefits program as it provides a unique way for companies to define their rewards program as something which is different from their competitors. According to a recent Mercer study that revealed that CEOs top preferences when it comes to their workforce is to firstly have a capable workforce which can successfully contribute to business growth and then to have them highly engaged. “This demand,” she said “is reflected in the top expectations of employees within India which, besides an increase in compensation, are around good learning opportunities and provision of flexible work options. Both of which can be successfully integrated into a company’s work culture without touching the compensation aspect.
Preeti cautioned companies to move beyond the general hygiene activities that mostly find increased utilization under the tag of benefits. “Moving beyond the basic health insurance, PF and gratuity pieces that most companies provide today to their employees as benefits often restrict employers from fully utilizing the option of benefits as a relevant component of their rewards program” explained Preeti.
In order to successfully leverage the opportunities that the benefits piece provides, Preeti added how it's “more of an act of looking inside rather than outside for solutions.” By looking within their own companies, Rewards professionals stand a better chance of creating benefits options that more personal and contextual to their company and the business context in which it operates.
In order to successfully leverage the opportunities that the benefits piece provides, Preeti added how its “more of an act of looking inside rather than outside for solutions.”
The second aspect that Preeti highlighted was the need to use analytics for the purpose of designing company benefits program. Designing data backed benefits program would help companies’ better plan their rewards program and leverage the most of what the benefits space can offer.
(This article is based on the session ‘Changing Spectrum of Rewards: Trends 2017 by Shanti Naresh and Preeti Chandrashekhar, held at the Total Rewards Conclave 2017, on 19th January 2017)