At WorldatWork’s Total Rewards conference in Orlando this week, one message rang loud and clear in nearly every session: Disruption is here to stay. With unemployment at an all-time low (and at only 2% for college graduates), leaders and practitioners in compensation and benefits need to be proactive when it comes to achieving pay equity and continuously proving the ROI of their total rewards strategies.
In a session titled, “Strategies for Retaining Critical Talent,” Sheila Sever, senior manager at Deloitte Consulting, made the case that organizations need to be much more innovative in their approaches to retaining top talent, high potentials, and critical workforce segments, such as software engineers, nurse practitioners, and even some skill trades.
She shared a few Deloitte statistics that illustrate the changing job market:
- 40% of workers are now employed in an alternative work arrangement
- 64% of millennials have a side hustle
- 67% of companies are struggling to find qualified candidates
How should companies – and comp and bens teams – handle the competitive market and changing nature of work? Sheila suggested increasing the frequency in which you pay employees. “Small spot awards given away liberally can have positive impact and are a low-cost way to touch employees more frequently,” she said. This is part of a broader shift Deloitte is seeing in the total rewards profession, which used to focus on recognition for tenure of service and now is focused on building relationships and motivating performance.
Justin Sun, compensation program manager at Expedia Group, emphasized that retaining high potential employees now requires multiple performance touch points throughout the year. It’s about having continuous conversations about career pathing and growth, “so it’s never a surprise.” Ad hoc bonuses and public recognition are other strategies that Expedia Group uses to cater to this particular employee segment.
Workhuman's panel titled, “Blowing Up Your Total Rewards Bonus Budget: Identifying What Really Drives Performance and ROI,” carried on the theme of disruption as well. Merck, Cardinal Health, Corning, and Autodesk, each shared how they’re working with Workhuman to centralize recognition, ensure compliance, and deliver more frequent, smaller awards to employees.
In working with the Workhuman Analytics & Research Institute, our customers are able to show immense cultural impact from their recognition programs. For example:
- At Autodesk, recognized new hires are 3x less likely to leave within the first year. Or, 20% of unrecognized new hires leave within the first year, compared to only 6% of new hires who receive recognition.
- At Corning, $500 in non-cash recognition is associated with a 58% decrease in employee turnover, compared to $500 in cash recognition.
Beyond turnover, Darlene Marino, compensation manager at Corning, shared that Corning is even exploring the types of words used in male vs. female award nominations and ways that recognition data can be leveraged to improve D&I initiatives.
“Think of [recognition] as a driver of culture, not a paid program,” said Ted Slaughter, director, global compensation at Autodesk.
Amanda Linard, compensation director at Cardinal Health, added, “Recognition has connected us as human beings across the globe.” In working with Workhuman, Cardinal Health has successfully transitioned from a manager-driven, cash-based program to a centralized, peer-to-peer program that improved recognition scores by 3.4 points on the company’s voice of the employee survey.
In addition to disruption in rewards, this year’s conference focused heavily on the urgent issue of pay equity. “If you haven't started looking at pay equity, you need to," said Emma Woodthrope, SVP and CHRO at Mercury Systems.
Today pay equity is most commonly being addressed by temporary project teams, with representatives from finance, communications, in-house legal, and analytics specialists. The problem with this approach is that it may not solve the underlying issues with your pay program. You may also have to think outside of the annual pay cycle to solve some of the biggest inequities in a reasonable amount of time.
Disruption in the labor market is forcing compensation and benefits to think outside of the box – to question the way we’ve always paid and rewarded employees. Especially as machine learning and AI take over some of the routine functions of our industry, we have an opportunity to be much more strategic, drive ROI, and ultimately deliver a stellar employee experience that will help our friends in recruitment and talent.
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