Article: 'Total rewards should ultimately drive overall business success'

Benefits & Rewards

'Total rewards should ultimately drive overall business success'

It’s time we should rethink our total rewards strategy, says Low Choy Huat, Partner, People Advisory Services, Ernst & Young Advisory Services Sdn. Bhd., in an interaction with People Matters.
'Total rewards should ultimately drive overall business success'

Choy Huat Low is a Partner and the Malaysia People Advisory Services Leader in Ernst & Young Advisory Services Sdn Bhd. He has more than 24 years of experience helping clients to improve organizational, workforce and people performance.

Choy Huat has worked with various companies in diverse industries, including energy, natural resources, aviation, automotive, financial services and public services, across Malaysia, Thailand, Singapore, and Indonesia.

He also has significant experience in major HR transformation projects, including the setting-up, design, development, and delivery of HR shared service centers for a national oil and gas company, a major Malaysian conglomerate, a global chemicals company, and a global mining company.

Here are the excerpts of the interview.

What has been the most significant change in employee benefits during the last five years especially in APAC or SEA market? How do they differ from other markets?

As companies consider the various strategies and operating models for the digital economy, the fundamental principle that rewards should be based on and driven by performance still remains. Interestingly, in the digital age, there is an even greater focus on the company’s and individual’s performance as a measurement of success. More often than not, this renewed focus on performance would require companies a total rethink of their total rewards strategy to attract, retain and engage employees.

Therefore, my experience in the SEA market is that many leading companies have started to shift the narrative on their total rewards philosophy. While remuneration is still important, often, it’s a more human-centric approach that is also reflective of employee needs in the digital workplace, whereby companies provide greater care for their employees such as the needs of millennials who have started young families. Elements like flexible work arrangements, well-being, flexible benefits, mindfulness, etc. are more commonly pitched as a form of rewards beyond the typical base salary and bonuses.

In the year 2020, we will see greater democratization and customization of rewards – tailoring specific rewards for employees, one employee at a time

Can you share an instance of a successful total rewards implementation by any organization?

The framing of total rewards should focus on two key areas: Firstly, it should ultimately drive overall business success, and hence factor in how everyone in the team contributes to a bigger financial outcome and the company's purpose. Secondly, it should then drive different behaviors depending on the nature of roles that could require more agility, such as for project management roles or be delivery focused such as operational, functional jobs.

Recently, I worked on a project to help a client who has moved very rapidly into the digital economy by setting up different digital companies with a holding group structure but their total rewards strategy has not changed from their traditional business. They need to hire new talent that they’ve not hired before such as data scientists while growing top-line financial metrics. Managing such diverse business needs is very challenging given that they have businesses across nine different jurisdictions. Ultimately, the solution involved balancing short-term and long-term rewards, focusing on key financial metrics and different rewards mechanisms to drive different behaviors.

How do you see the rise of technology especially analytics and how are they transforming pay and benefit practices?

There are different areas where technology is impacting HR – be it through data and analytics, cloud, robotic process automation (RPA), blockchain, artificial intelligence (AI) or even different delivery models. For example, in HR Operations, RPA is used in processes such as payroll to work more effectively and efficiently, given the capability of bots to work 24/7 while ensuring compliance is met and accurate payroll is processed to deliver an enhanced employee experience. At a more strategic level, the payroll information is often analyzed to provide insights to assist HR Directors to make better performance, talent and reward decisions aligned to business strategies.

Rewards philosophies will need to be linked to the greater purpose of the company, which will require in-depth reflection and integration between policy and purpose, to really make it impactful

What are the top challenges that businesses face when it comes to framing the total rewards strategy and its implementation?  

My view is that companies that fall short have archaic rewards philosophies that need to be updated. They have to understand that money is no longer the most important factor when it comes to enabling an exceptional employee experience or in attracting and retaining top talent.

Essentially there are three challenges. Firstly, HR departments and practitioners are not agile enough to switch or move their total rewards strategies. More often than not, they were involved in designing the outdated scheme, which is why there is resistance. HR departments and practitioners also do not know what to do or fail to seek help fast enough. Secondly, there is a lack of support from the board and top management as they may resist the change and adopt a more forward-looking total rewards approach. Thirdly, articulating the business impact beyond the financials is not easy and therefore the case for change needs to be looked at from the lens of the employees, not the employers.

As we enter the year 2020, what trend or development do you think will significantly impact the reward profession?

In the year 2020, we will see greater democratization and customization of rewards – tailoring specific rewards for employees, one employee at a time. Another key trend is that rewards philosophies will need to be linked to the greater purpose of the company, which will require in-depth reflection and integration between policy and purpose, to really make it impactful.

 

Read full story

Topics: Benefits & Rewards, #Outlook2020

Did you find this story helpful?

Author

QUICK POLL

For how long do you think the current pandemic situation will impact the world of work?

On News Stands Now
q_auto,f_auto/v1583398016/mag-march-2020.png

Subscribe now to the All New People Matters in both Print and Digital for 3 years.

.

Subscribe
And Save 59%

Subscribe now

How likely are you to recommend our content to a friend or colleague?

01
10
Selected Score :