Rewarding a multi-generational workforce
Designing a strategy around age-old programs will not work for every generational segment in the workforce
Workforce in most of the organizations now is a combination of Gen X, Gen Y, and the outgoing Baby Boomers. Each of these generations has its own aspirations, preferences, and life goals. This fact makes it difficult for HR professionals to design a Total Rewards strategy which appeals to all of these segments in the workforce. Every generation, due to its different priorities, has different expectations from the organization they work for; hence, they have different preferences about what their total rewards should consist of.
Designing a strategy around age-old benefits and rewards will not work for every generational segment in the workforce. While Baby Boomers are more anxious about security, Gen Xers or Gen Yers might prefer opportunities for career development. There is no one answer to what works, but ignoring the requirements of a large chunk of the workforce would certainly not work. Here is what organizations can do to design Total Rewards to suit their multi-generational workforce:
1. Identify some basic ‘foundational’ rewards for all generation of workers: Each component of Total Rewards should have a few core benefits which form the base of the strategy and work for every generation. Before formulating a Total Rewards strategy, it is advisable to have an evidence based approach and collect feedback from employees to understand what their expectations are.
2. Prepare the right mix of traditional and non-traditional benefits: Once a few basic options are finalized for every component, it is advisable to create a right mix of benefits. Work towards including options, which are lucrative to all the employees. An option such as employee purchase programme, which enables employees to buy products through payroll deductions, will be attractive for Gen X and Gen Y, a gift voucher or paid trip will be welcomed by even a Baby Boomer; health and wellness initiatives attract almost all the generations. Similarly, spa packages, gym enrollment, getting employees’ kids to painting school etc are some not-so-common benefits that can be included in this bouquet. Some of these options work for only married staff members. In case of unmarried staff members opportunities for water-rafting or bungee-jumping may work.
3. Use voluntary benefits and recognition as a crucial tool: Voluntary benefits that help employees customize their Total Rewards package as per their needs work best for a multi-generational workforce. They give all participants an option to choose what works best for them without creating extra cost-pressure on companies. Undoubtedly, recognition (whether combined with rewards or not) works best for all the sections in a workforce.
How companies make it work
A Total Rewards programme should be looked more as a process that continues and evolves rather than a project that is worked on and closed with the launch of the programme. An ideal Total Rewards programme should be responsive to changing organizational conditions and workforce. Here are a few Total Rewards trends noticed in high-performing companies:
- Even distribution of resources in all components of Total Rewards to attract and retain talent.
- Special emphasis on interventions supporting work opportunities and recognition for their staff.
- Companies need to invest more in rewards in the sphere of learning and development and employee wellness etc.
- Adjusting HR structures to support implementation of Total Rewards. This includes even distribution of related activities throughout the year and communicating with employees. This removes the gap between what employees are told (if at all) about the Total Rewards programme and the value that they get in the end.
- Through data gathering i.e. research, they involve all the key stakeholders in the process of reward designing. Data gathering helps give a clear idea about requirements and expectations of all the stakeholders.
- They focus on establishing two way communication channel for effective implementation and dissemination of information regarding objectives of the Total Rewards strategy.