The Fourth Industrial Revolution is upon us. The future of work and the workforce is transforming at an unprecedented pace. How to reward and how frequently to reward employees are compelling employers a rethink. We have seen several key shifts at work over the last few years including the shifts in rewards processes and rewards programs which are shaping up to adapt to the new workforce.
For employers looking to evolve their rewards programs, it’s not enough to just analyze employee preferences and compensation costs. It’s time to analyze workforce data to be able to come up with the most optimized program that can help their organizations drive retention, engagement, and productivity.
In a deep dive at TechHR Singapore, Puneet Swani, Partner, Career Business Leader - International Region, Mercer, talked about the key themes influencing the future of total rewards.
There are four key themes that are influencing the future of total rewards, according to Puneet.
The future of total rewards
There has been a shift away from the traditional job descriptions and changes in job evaluations. We also see a shift in the job-based framework to skill-based framework, says Puneet. Secondly, the reward processes are changing to be agile and intelligent to adjust quickly to market benchmarks. The evolution of technology is helping to come up with flexible reward processes as well. There has been a change in reward offering with new compensation and reward models as well. Reward offerings are now flexible that integrates work and life. The talent experience is driving the future of total rewards with a holistic experience that addresses the individual needs of all talent, according to Puneet.
This is followed by purpose-driven work that is aligned with social and ethical values. Finally, welling of employees will become the core agenda for organizations, Puneet adds.
Employer value proposition
The creation of value is an intangible but critical scheme for most new age businesses. However, only 2 in 5 employees believe their organization has a compelling employee value proposition. Employee Value Proposition (EVP) refers to the mix of benefits and rewards that an organization offers to its employees in return for their work. However, EVP also factors in intangible components such as culture, professional development opportunities.
Puneet argues that the employment deal needs to change significantly to be able to adapt to changing demographics. Employers have to ensure their proposition resonates with five generations. It’s time employers have to translate their EVP into Talent Experience Proposition to be able to meet employees’ evolving health, wealth and career needs. The other important factor is flexible working. Employees have to create a culture that enables people to contribute under flexible work arrangements.
Disruptors and future of rewards
Noting that we are living in an era of disruption, Puneet cites macro trends that are also reshaping the future of rewards. This includes reshaping organization structures, and digitalization and Artificial Intelligence. He adds, over 90 percent of executives are planning organizational redesigns which in turn will demand agility in reward systems. Artificial intelligence which is present in almost every major industry from healthcare to transportation, finance, and education is now transforming our workplaces. Technologies such as artificial intelligence that can analyze huge sets of employer data and make intelligent recommendations have the potential to transform total rewards practices. In fact, technology is enabling the digitalization of reward programs, delivering a better experience at lower costs which will eventually help change capability needs from rewards, adds Puneet.
You can watch the session here.