It is getting harder for employers to be sure that they are getting their money’s worth out of the reward spend. Over the past few years, companies are struggling to understand how to retain, motivate and engage an increasingly complex, diverse and mobile workforce, within the constraints of lower pay awards.
The reality is that the expectations and needs of employees vary across generations. Therefore employers must appeal both to an aging population, concerned about retirement security and health benefits, and the growing influence of Generation Y (born between 1982 and 1993), and New Millenials in the workforce, for whom work-life balance, experiences, and learning and skills development are often valued more than pure compensation.
So what should employers do?
Firstly, ensure that all the benefits of working for an organisation are included within the reward conversation, such as agile and flexible working, learning and development, and where relevant, the potential for international assignments. With limited funds, and employee focus changing to work-life fit, opportunities for career breaks, and flexible and / or mobile working options will feature as highly on the agenda as pay.
Next, make sure that there is a rewards conversation. Experience tells us that many employees do not know what their employer offers and companies may lose staff to employers who offer the same but communicate it better. It is as much about shouting about what you offer as it is about differentiating yourself from the competition.
Then, think about the business strategy and what kinds of behaviours and skills will be needed to make the strategy a reality. The Rewards programmes must figure centrally to facilitate enhanced business outcomes through attracting the right skills and reinforcing the right behaviours.
Take the time to find out what employees really value. Research by Deloitte suggests that programmes with the highest cost to the organisation receive the most attention from the employer, as opposed to programmes which are perceived most favourably by employees. Just this week, KPMG announced a partnership with Clydesdale and Yorkshire Banks to provide staff access to preferential mortgage rates; an attempt aimed to assist many of its staff in the ever-increasing struggle to get on the London property ladder.
Finally, and most importantly, be bold in thinking about reward. Companies are increasingly looking at new approaches to traditional compensation and benefits offerings, such as driving maximum flexibility through all aspects of reward, thus enabling employees to match their reward to their lifestyle, and the employer to derive maximum value for the reward spend.
Offering flexibility to the balance of cash and savings for retirement for example, can appeal to different employees at different stages of their lives. Offering flexibility as to hours of work and when and where employees can work, can shift the focus to output rather than presence and appeal to employees trying to juggle home and work commitments, supporting diversity and a more inclusive working environment.
Recognising that different people want and need different things, and flexing your reward arrangements to offer these without increasing the overall spend, will go a long way to realising greater value from your reward offering.
Carole is a Director in the Human Capital Practice with 18 years consulting experience with Deloitte. She has a wealth of experience in leading organisational effectiveness programmes to deliver strategic business objectives. She specialises in global transformation and restructuring programmes involving organization design, behavioural change and complex labour relations.
 2014 Global Top Five Total Rewards Priorities Survey Report