Among other things undergoing transformation during the pandemic, it is also time to step up and revisit the total rewards strategy, factoring in both the compensation as well as benefits. Organizations can't simply return to pre-pandemic reward and benefits assumptions. The needs of both the employees and business have changed. Workplaces have gone beyond the physical office structures and employees now face new challenges.
Talent leaders have to focus on redesigning the compensation and benefits system keeping in mind the current challenges of both the people and the business. In a recent interview, Rajdeep Laha, Assistant General Manager – Total Rewards, L’Oréal India, discussed this changing landscape of compensation & benefits and also shared how L’Oréal is revisiting its rewards and benefits strategy.
“Transformation and technology have been the common thread for bringing in agility - which is currently the need of the hour,” says Laha.
Here are the excerpts from the interview:
As business and HR leaders look to reset workplace and people policies in the new reality of work, how is the compensation & benefits landscape changing?
The scale and impact of living through this pandemic are permanently changing the way we think, prioritize, and make decisions. This eventually changes the ‘employee expectations landscape’ from their respective organizations. We at L’Oréal are cognizant of the changing needs and expectations of both the employees and the businesses.
Among a few trends, which we foresee unfolding within the Total Rewards space is a renewed focus on “Care” & “Protect”.
“Care” and “Protect” are two of the main pillars of our global benefits framework that address the need for the organization to protect employees with best in class insurance coverage. This element of the ‘benefits offering’ may not be the most talked about subject but it is extremely critical in India, given our limited social security coverage and low penetration of insurance - both life and health. This essentially means, even today most employees are entirely dependent on the company for such covers.
In recent times, we have experienced high levels of employee interest and awareness around these benefits. There has been a surge in demand for our Voluntary Parental Policy. We are receiving many inquiries on the coverage details of our employee health and life plans. Recently, we have covered all our employees with an additional COVID cover. This gives them a lump sum amount to cover key costs if they are diagnosed with COVID. We have also ensured that any expense, which might be incurred without hospitalization, is taken care of by the regular policy.
Encouraged by the engagement of our employees towards these benefits, we are also preparing to launch an employee-centric “Flex Benefit” system, which will empower our employees to customize their benefits plan, including additional flexibility to opt for a health plan, to meet their and their family’s needs specifically.
On the compensation side, we foresee a much greater emphasis on 'cost optimization' given the impact this pandemic will have on business growth. The inevitable medium-term impact of this would be a marginal increment in the salary budgets for the upcoming year.
Given this context, our focus would be to ensure continued retention and motivation of key contributors, through sharper differentiation of rewards and by creating a stronger linkage of rewards to performance through smartly designed variable incentive schemes.
The second priority would be to continue investing in our leadership pipeline by hiring from the best campuses in the country; hence we will look at ways to ensure we remain competitive in terms of campus compensation.
How does the work model at L'Oréal look like currently? Can you give an overview of the new physical/virtual hybrid workplace?
Being conscious of the needs of our employees, L’Oréal has always experimented with work-models that would be optimal for our people. Be it a formalized remote working policy or various employment models to cater to and leverage the gig economy. This has helped us transition smoothly into various work-models to suit the need of the hour and support the needs of the business.
Currently, we have an O+O model (onsite and online) which means our employees are operating from home (online) or our office (onsite) - depending on the business needs and the guidelines set by the local government in each of our office locations.
The onsite model further has several strictly defined precautions in place to ensure those onsite are safe and protected. For example, Team A/ Team B structure is followed which means in a given week only a particular set of employees based in that office (Either Team A / Team B) can operate from there.
Even for the sites where we are operating from office, virtual meetings have become the norm. The offices are sanitized thoroughly and regularly during the day, by housekeeping staff who have been specifically trained and equipped to do a thorough job. We have physical demarcations of areas to ensure social distancing is followed, in addition to sanitizers placed at common areas, masks, and temperature checks for everyone coming into office.
Have you made any changes to your compensation & benefits model? Please share if you plan to introduce any new benefits amid the pandemic.
While we had implemented an Employee Assistance Program (EAP) in 2017, we have recently seen an increase in the number of employees and their family members availing this counselling benefit.
There is another internal program “Wheel of Wellness” which focuses on holistic employee wellbeing – including Health, Mental Wellness, Financial Wellness, Physical activities, and Nutrition.
In the last couple of months, we have quickly pivoted to transform the program into a digital offering and launched several virtual initiatives branded #WellnessNeverStops. The program has seen an unprecedented uptake by a large number of employees and has been widely appreciated.
We believe mental wellness and counselling are areas that will become more and more critical going forward and are continuing to invest in more offerings in this space. We are also looking at launching an AI-based counselling ‘Chabot’ that acts as a precursor to the counselling service. Through this offering, we hope to make counselling opportunities more accessible and convenient to employees and help in overcoming the hesitation associated with availing such a service.
As organizations work towards streamlining their performance and rewards framework, do you see tech playing a critical role here?
Transformation and technology have been the common thread for bringing in agility - which is currently the need of the hour. Going forward tech will be the key differentiator enabling organizations to achieve maximum efficiency and provide the best in class employee experience.
At L’Oréal, part of our transformation into a BeautyTech company includes a major HR tech transformation, preparing the organization for the “Future of HR”. Our current systems are being reviewed and will be replaced by future-ready global solutions to provide the best in class employee experience. In addition to this, there will be added focus on data, predictive and prescriptive analytics in HR and AI-enabled solutions to make our decisions sharper.
With remote working becoming the new normal & more companies adopting gig-working models, what upcoming trends do you think will emerge in the Total Rewards space?
In recent times, there is an increased appreciation of both personal and family time among employees, which we believe will result in significant changes in the Indian job market. We have therefore been reviewing our existing practices to adjust to the ‘new normal’.
As an organization, we have always had a strong focus on promoting a work-life balance with practices like “Remote Working”, Flex-Timing, Sabbaticals, “Mandatory leaves", best in class policies, etc.
What should employers keep in mind while revising the performance framework for their remote employees?
L’Oréal as a company has always promoted flexible working - what we call “Work Smart” internally, which provides our employees with various flex work options including remote working. Some of the basic principles based on which this culture of remote working has been established are trust, accountability, and responsibility between managers and the employees. We have always stressed on productivity rather than face-time.
Hence, in that sense, we have been quite well prepared for this “new normal” of remote working. Having said that, we do realize that this prolonged lockdown is raising a new set of challenges for employees - lack of face-to-face interactions with managers and peers, a feeling of added workload, uncertainty of the business context, etc. all leading to added stress and mental wellness issues.
There is a renewed focus on regular feedback and meaningful conversations with team members, rather than waiting for the mid-year or year-end reviews.
We have been dealing with these challenges with various initiatives to “empower our managers” with the right leadership skills to engage the team, be sensitive to the stress and anxiety of the current situation, and review goals in the context of the new norm and changing external environment.