Often it has been challenging for organizations to consider if they should be giving compensation to their employees as cost or investment. However, with changing patterns in compensation and benefits trends, many organizations now are rethinking and redefining their strategies to meet the expectations of a modern workforce while achieving the organizational objectives.
Building the right talent pool
Compensation and management trends have a major influence on how employers attract, engage and retain employees. In the age of fast-paced markets, employers today are spending more money and energy on hiring and retaining top talent. Talented people are assets for any organization and if assets are rightly managed they create value and drive the organization’s revenue and growth.
Performance is the new mantra
Gone are the days when employees got their pay or bonus for efforts or tenure, even if they were not productive. Here is an age driven by performance and forward-thinking organizations are going all out to design a compensation structure that offers lucrative incentives to high performers. For example, employers are focusing on giving variable pay components as a motivational strategy for driving performance to employees in organizational goals. Instead of working on increasing base pay, they are placing more emphasis on distributing gains via bonuses that reward actual goal attainment.
Some organizations are also offering a variable compensation rate of 7-8% in addition to base pay to top-performing individuals while many others are experimenting with breaking bonuses into smaller and regular amounts. The idea of periodical rewarding is to keep the momentum of the employees going all through the year.
Total Rewards: The Strategic Enabler
Reports revealed that some companies are using bonuses based on peer feedback to boost employee engagement. Rather than managers handling the payment terms and conditions, the system includes everyone in the decision making process. Besides incentives and bonuses, companies are also looking at differentiated reward structures as strategic enablers for empowering organizational goals. The concept of ‘total rewards’ is gaining ground as a powerful tool for accomplishing performance excellence while meeting critical and customized needs of best performers. With scores of enticing offers around, only monetary benefits are no longer enough to lure and contain the modern workforce.
Exploring the benefits
Any total reward structure would have a cash or compensation component. This would include near-cash allowances included for tax purposes; benefits like life insurance, mediclaim, cars on lease, corporate wellness plans, childcare, concierge service, office pickup, and drop services, access to good discounts, merchandise coupons, gift cards, meal vouchers, health and wellness programs, maternity benefits etc.
Celebrating non-cash awards
Research indicates that more than cash payouts, non-cash perks have captured the imagination of the young, contemporary workforce as they have great pride and recognition value are easily promotable and employees find it convenient and trendy to celebrate non- cash awards.
Redefining the employee experience
Nowadays, employees are required to juggle multiple roles as against standard job responsibilities in earlier times. As roles evolved, expectations of flexible rewards also went up. Today millennials may want privileges like extended leaves or gym memberships. Recognizing this changing trend, many organisations are focusing on curating the best employee experience. The whole idea is to keep the workforce happy and motivated so that they can be more productive and goal-oriented while striving towards achieving excellence. A personalized total rewards program can also be created where performance evaluation will be skill-based and considering the employee’s life stage and personal needs.
Striving for optimal wellness
Today workplace stress is a growing challenge owing to cut-throat competition and employers do realise they need to adopt a better compensation approach that will look at health and wellness holistically. In addition to the existing medical insurance schemes, gym facilities, and occasional sick leaves, now organizations are introducing in-house yoga-sessions, periodical health check-ups, counseling and wellness clinics in their revised compensation package.
Building Trust and Transparency
Often employees are clueless about their compensation, tax implications or their salary structure. Salary slips are still complicated and do not explain the working strategy behind a certain raise or remuneration. Employees want to work with employers who are more transparent about their benefit and compensation policies. Incidentally, hiring professionals have started openly communicating the compensation structure and strategy for raises and remunerations with employees. In fact, HR professionals are now considering compensation as a powerful tool for building a strong bond of trust and belongingness across the organization. Every employee has the right to understand the performance parameters and how they are being translated into perks and incentives. .Deploying a compensation and benefits program based on open communication and transparency is a great way to establish a strong employer-employee relationship.
Technology: The real game-changer
In more recent times, various technologies have evolved that seamlessly integrates HR and business systems for better compensation management, encouraging authorities to create and implement strategies more effectively. Choosing the right software that is smart, intuitive and capable of handling day-to-day administrative tasks is the key to success. The traditional compensation planning places the organisation’s pay data figures across numerous spreadsheets that are manually updated, consolidated and managed, However, the latest software is sophisticated and time-saving and incorporates flexible-compensation planning.
Automation is the key
It has an automated salary management process where administrative work comprising of data collection, storage and management is handled by a smart, secure and easy-to-use compensation software tool connected to a company’s payroll system. The tool not only helps in centralising data management, but it also aids the compensation professionals in accessing the salary data for the entire organisation quickly and easily along with providing a detailed insight of how is being managed and spent.
Most importantly, great amount of time and resources spent on accessing spreadsheets is easily saved, thereby allowing professionals to focus on drawing insights from the data, analysing and strategizing for identifying the emerging patterns making revisions and updates based on market trends, and creating budget models that show the cost implications of salary and merit increases over time. Such analysis helps the organisation in capitalizing on the best talent in the best possible way.
Cloud-based software solutions are also emerging that will cater to compensation planning, total rewards strategizing, applicant tracking, performance and content management, and others.
Workers’ compensation: The changing face
While the workers’ compensation industry is focused on improving medical outcomes and extending better care for injured workers, it is now opening up to exploring newer possibilities for achieving the objectives more efficiently and effectively. Advanced technologies that facilitate s smooth processing of workers’ compensation claims are being adopted for boosting the organisational productivity. For example, employee injury will significantly reduce as wearable technology and mobile apps are being designed in a way that will indicate fatigue, body temperature, and repetitive motion data. Besides the incident reporting and claims process can be simplified through digital reporting capabilities, automated workflow management, and easy information transfer.
Telemedicine will play a major role
It is believed that in the next five years advanced technologies such as artificial intelligence, wearables, catboats, mobile, telemedicine, and others will prove as real game changers in the compensation industry. In fact, telemedicine is being touted as the ultimate technology that will have the biggest impact on the workers’ compensation industry.
The value of human capital is immense and if businesses have to grow, organisations have to raise employee morale and cultivate a culture that will create and nurture a happy and inspired workforce.