In 2022, with the Great Resignation or, if you will, the Great Realignment, workers are looking for job situations and rewards packages that support them in their lives. As a result of this and other factors, the era of what we call “one-to-one compensation” has arrived.
Attracting talent in today’s environment requires flexibility in compensation and rewards. beqom’s latest research, 2022 Compensation and Culture Report: Rethinking Pay Strategies for a Changing Workplace, provides insight into what job seekers and employees want and need from employers in terms of compensation. The challenge is, how can employers make workers happy when everyone has different needs?
Responding to a challenging hiring environment
"This is the most turbulent compensation environment I've seen in my 30-year career," said Tom McMullen, senior client partner in total rewards with Korn Ferry in Chicago, speaking to SHRM.
"Employers need to up their game because there are not enough people to go around," McMullen said. Some ways suggested for keeping current talent include implementing counteroffer programs; accelerating promotions for key talent; and offering signing, retention, and referral bonuses for a wider range of employees.
Delivering rewards that work requires flexibility
Workers are motivated by rewards that meet their needs, and there are many different types of workers — men vs. women, parents vs. single workers, full-time vs. part-time, different generations at different life stages, remote vs. onsite, etc. — so it stands to reason that the best way to motivate a workforce is to provide targeted rewards that meet the needs of individual employees.
According to a BenefitsPro article on compensation strategies for 2022, “Savvy employers must develop an aggressive compensation strategy that includes quality of life benefits, flexible work arrangements, and performance-based incentives, packaged to appeal to both candidates and investors. Those who fail to step up their game will find themselves on the losing side of the talent war.”
Tailoring rewards in a flexible way can be a complex task. First, you must have the data and analytics to understand the makeup of your employee base, along with an appreciation of the needs of your various workforce segments. Then you need a mechanism to match employees with the rewards package that is going to best support and motivate them. Finally — and this part is often overlooked — you must be able to manage the process of delivering, tracking, and communicating those rewards, efficiently and effectively.
One-to-one compensation is here
One-to-one compensation management means that you have the flexibility to tailor rewards programs to different geographies, roles, and employee needs. Just as one-to-one marketing strives to create an individualized experience for each customer, one-to-one compensation provides each employee with a rewards package designed to elicit maximum engagement, enthusiasm, productivity, and loyalty from each individual.
beqom’s 2022 Compensation and Culture Report revealed that flexibility and transparency are of key importance to today’s employees. The majority of workers reported looking for a new job and said they would switch for flexible hours, more PTO, remote work options, and transparency in pay.
Employers are continuing to adapt, addressing the Great Resignation by adopting flexible hours, remote work options, expanded paid leave, mental health, and wellness benefits, added childcare subsidies, and a range of traditional financial benefits such as 401K and bonuses.
“In this tight labor market, it is more important than ever that employers utilize a competitive and creative compensation strategy,” according to the BenefitsPro article. “To attract – and retain – top talent, companies must offer unique perks and add-ons on top of robust cash packages.”
Implementing one-to-one compensation
Whether you are implementing a full-blown one-to-one rewards strategy, or just trying to improve the automation and effectiveness of your compensation processes, a dedicated compensation management solution can help you achieve your objectives.
Legacy systems and standard HCM suites are not designed to manage tailored rewards. Most cannot even handle multiple bonus programs. Flexible, one-to-one compensation calls for best-of-breed, enterprise-scale compensation management software. For more information, contact a compensation expert at beqom.