Article: The promise of a rewarding year ahead

Strategic HR

The promise of a rewarding year ahead

10 path breaking trends that are going to change the way businesses function in 2014
The promise of a rewarding year ahead
 

To harness the GenNext, engagement programs will have to be relevant to their mindset: Engrossing, easy to use, with the appropriate incentive (read money) built in

 

Reward management - from payroll to engagement - would start looking at smart-phone, and tablet enablement to connect with people

 

The political environment will be a major driver of corporate activity in 2014. If Delhi is to be considered the bellwether, then it’ll be all about alternatives and stalemates! Corporate India seems to be backing what seems like a galloping horse. The hope is that the rest of the public will reject the old nag and do the same, heralding the resurrection of India’s dead-duck economy. So what does 2014 look like?

A new political scenario. Easing of the long-standing paretic atmosphere. Frenetic activity in the boardroom, rewriting strategies, changing gears, scrambling for investments. An optimistic workforce expecting higher merit increases, which will get swallowed up by high inflation. A new batch of NextGen employees entering the work force. ‘Give us this day our daily change’ will be the new prayer.

Understandably, few unique or path breaking trends are visible for 2014 for businesses overall, including the Reward space. Still, 2014 promises to be a busy and exciting year on some counts:

A justifiably nit-picking C-Suite:Expect serious pressure from the C-Suite! CEOs claiming to spend a significant amount of time on people practices are expected to get more granular, which means that Reward managers will need to go deeper into their recommendations. Insights on how to effectively distribute S&B budgets – without increasing them – will take on a new hue. Most surveys agree that merit increases will be in the vicinity of 11 per cent, which really means 2 per cent after inflation. Who’s to get higher increases and who can safely be given lower increases while improving engagement and retention?

A spirited next-gen workforce: The energetic and highly entrepreneurial mindset of the new workforce will continue to challenge traditionalists. This easily distracted lot, with its short attention span, expects the money and the learning at the same time and quickly. And they are willing to go the extra mile to get both. To harness this talent, engagement programs have to be relevant to their mindset: Engrossing, easy to use, with the appropriate incentive (read money) built in. No longer will we hear the line ‘it’s not about the money’. Because it most certainly is! And it will be a solid reason for attrition. Building in elements of leadership skill building into engagement programs will help retain this talent.

Compensation numbers and ‘Big Data’: Traditional pay data-cuts supplied by cookie-cutter service providers will no longer be adequate. Driven by demands from more hands-on CEOs, Reward managers will expect closer comparable lists, sharper data analysis and a wider range of employee segments. For example, job family benchmarking may need to be further dissected to match employee demographic data points determined by the C-Suite. Thus comparisons will get more granular and relevant to make more efficient pay decisions. Data presentation through graphical user interfaces, or dashboards, will get far more customizable. ‘Datafication of people’ is clearly the road ahead – so it had better be customer-friendly and colorful!

Technology will need to get more ‘with it’: The demand for quality data and smart dashboards to make HRMS efficient and useful will only increase. So technology will have to ably back this up, forcing greater innovation from the plethora of tech-providers promising to effectively ‘datafy’ people. It may mean enhancing DIY capabilities of the client or adding to the bells and whistles of the final output or both. And tech costs must come down as the critical mass increases. Cost and agility will rattle legacy service providers – reigning monarchs in this space. New technology solutions may be colorful and fast, but the questions that will keep coming up will be around their relevance. Reward managers will need to work hard to drill down and focus on the core deliverables of the solutions they are presented with and junk the rest.

Pay and Engagement will get used interchangeably: It’s always been naïve to expect that engagement alone ensures performance. Because pay is rapidly moving up the priority list. Some say money now sits second, immediately after professional growth. It’s logical! Ploughing against a sluggish market has brought in fatigue. The high increasing cost of living has not helped either. Overlay these with the ambitions of a younger workforce and the social pressures they face, and money takes on an importance like never before. Chances are that compensation aggregates like short-term incentives and some benefits will be merged with engagement programs. Good examples can be seen in gamification programs that are gaining popularity as effective management tools.

Benefits will get more customized: Given the current tax structure, there are very few benefits that escape taxation. The few that remain have varied relevance. Insurance programs and pension plans are classic examples of this. The relevance of these would vary depending on the age and tenure of the employee. Using a more qualitative approach and pushing back service providers who will insist on a quantitative approach can save companies significant amounts of money – without affecting employee satisfaction.

Mobile: Clearly this has lived up to all the hype around it! Today’s workforce virtually lives on their mobile devices! The desktop and even laptops will be deemed to be too clunky to be considered effective communication platforms. Reward management – from payroll to engagement – would start looking at smart-phone, and tablet enablement to connect with people. And rightly so! Go fishing where the fish are!

Outsourcing: HR has been outsourcing ‘grunt work’ for some time now. And, minus a bit here and there, it has worked well. This success story will percolate beyond the larger corporations and multi-nationals into small- and medium-sized companies as well. Also, more elements will be defined as ‘transactional’ and outsourced. This will free up HR managers so they can focus on the more critical tasks of leadership development, talent retention and getting visibility in the employee population.

HR roles: There are indications that non-HR professionals will move from business lines into HR functions. Irrespective of whether it is a development perspective or a career shift, this is good! These individuals would make ideal relationship managers because of their first-hand understanding of business processes and challenges. Secondly, HR roles themselves will rotate. Generalists may have to perform Compensation and Benefits roles – either because of the paucity of such specialist talent or its cost. Reward managers will need to spend less time crunching numbers – that would have to be done by service providers – and more time walking the office floor. First, to ask people what they expect in terms of reward and engagement programs and thereafter communicate the programs incorporated for all-round understanding. Time to learn some marketing skills!

Compliance and Governance: Thanks to some brave people standing up and blowing the whistle against workplace injustice, 2014 will see an even greater emphasis on compliance and governance. The CEO will absolutely insist on it. Her neck on the line will get even more vulnerable as the implementation of the law gets swifter – Social Media will guarantee it! There will be greater noise around CSR – with the regulators seeking inputs on how the law is being followed.

It’s going to be nebulous…

Well, here’s the good news. The HR community, specifically the reward manager, has access to far better tools, technology and services to suit every requirement at prices to suit every budget. It only requires an open mind, the eagerness to learn new things and, most importantly, the curiosity to do some digging. Is India Inc up to it? Sure!

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Topics: Strategic HR, #Trends, #ExpertViews

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