This is the weekly Careers newsletter.
Radhika Panjwani is a former journalist from Toronto and a blogger.
Companies scrambling to attract and retain talent should review their total rewards strategy and move beyond the base salary, bonus and other average incentives, say experts.
Instead, compensation packages must be creative, flexible and customized, says Anand Parsan, national practice leader for compensation consulting at consulting firm Eckler Ltd.
“Things such as flexible work arrangement or work-life balance that were non-negotiable in the past are now becoming table stakes as organizations adopt a more holistic strategy to retain employees,” he said.
Imagine for instance, offering some employees a number of rewards credits to pick, choose and use whichever way they want. Those with a spouse and children will likely spend it differently than employees who are single, Mr. Parsan said.
Programs that allow workers to choose and spend the money where they see fit will go a long way in attracting and retaining a multigenerational and diverse work force, he said. “A one-size-fits-all approach is a recipe for failure.”
Resistance and roadblock
Despite seismic shifts to the labour market and employee preferences, salary and benefits have remained unchanged for decades. There may be several reasons for this.
Some organizations don’t have a robust people strategy, one that will allow for the creation of a total rewards plan. Others may have a strategy in place, but their execution may be flawed. For instance, many organizations, even when they make changes to their total benefits strategy, don’t communicate it well to employees.
“One way to tell if you’re doing it right is to look at your engagement surveys,” Mr. Parsan said. “Typically, engagement scores on compensation are usually one of the lowest.”
Companies that get it right translate the contents of surveys into benefits people want. Others may opt for a comparative benchmarking and analysis to find out how they stack up and what elements they’re missing.
How to build rewards
Mr. Parsan suggests organizations interested in redesigning their total rewards strategy consider the following:
- Ask and act on employee feedback. A caveat: Avoid creating survey fatigue because if you keep asking people the same thing but nothing ever changes, employees will give up.
- Understand your business strategy. Define your goals and priorities. What works for others may not necessarily work for you.
- Get the buy-in from leadership. If you don’t have leaders who want to move the ball forward, then no matter what, it won’t happen.
- Communicate. Relay what you have implemented or introduced to improve the survey score.
“The market for labour is so hot now that you see organizations scrambling to attract and retain talent,” Mr. Parsan said. “This [total rewards strategy] is not a one-time thing that’s related to the pandemic. It’s the way of the future.”
A case for change
When a major U.S. brokerage recognized it was out-of-touch with the needs of its people, it was able to stanch the exodus of employees by tweaking its total rewards package.
So, based on fresh insights, the company revamped its performance-based compensation by reducing equity awards, enhancing supplemental health care, and introducing a personalized training and development portal.
Agent sales performance increased to 20 per cent from 5 per cent, engagement rose to 21 per cent, and employee satisfaction and retention showed up to a 20-per-cent increase in some areas. The icing on the cake was all the wins came with a decrease in compensation costs of 8 to 12 per cent, note Andrew Curcio and Alastair Woods, PricewaterhouseCoopers experts in a Strategy + Business blog.
Companies need to rethink dated practices because employees are offered “the same menu of choices,” such as health benefits, pension contributions, cash/bonus incentives and gym memberships. The co-authors said if companies were to ask employees’ feedback on the rewards package, they’d be shocked by the strong negative response.
Data show the relative standing of financial compensation has dropped by 11 per cent over the past decade, while other types of benefits such as medical, dental, vision and life insurance and child care has doubled. The kicker: Work–life balance options and training and career development needs have tripled in importance.
The two experts suggest employers will need to understand employee preference and not just rely on a cumulative measure.
“The real differentiator for companies looking to attract, keep and motivate talent today is customization and communication,” the PwC experts say. “Employers that transform their total reward offerings with this mandate in mind will create a sustainable win for all stakeholders and have a significant competitive advantage in the ever-present war for talent.”
What I’m reading around the web
- An article in Psychology Today Canada notes our many interactions, whether it’s with family or co-workers, reflect who we are. The problematic people in our lives reflect our insecurities and inadequacies. The author challenges us to go deeper into ourselves and take a compassionate look at those with whom we have interpersonal conflicts.
- This story on CNBC identifies the five riskiest jobs to be working during a recession – real estate, construction, manufacturing, retail, and leisure and hospitality.
- Your next job interview could take place in virtual reality thanks to advances in artificial intelligence, and virtual reality, says this story on BBC. Students at Sandwell College in West Bromwich, Britain, put on VR headsets to do mock interviews. Some questions they got asked included, “Tell me about your greatest achievements,” to the more thought-provoking, “Do you prefer to be loved or feared?”
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