Changing Landscape of Rewards for the Future Workplace
In this dynamic world, where massive changes are happening in the environment, it’s time for us as Rewards Leaders to start rethinking about moving away from the traditional rewards mechanism and proactively plan, for the future. As we enter a new decade and 2030 appears on the horizon, the world is at a crucial juncture.
We as HR Leaders have heard the statistic which is, in the next five years more than half of all workplace tasks will be performed by machines. Many jobs that exist today as we know them, will cease to exist. We know the impact of automation on working people. One of the data points from the World Economic Forum talks of the below.
We know that technological change is happening faster than before. While we know technology is a part of our future, we don’t know how large a role it will play. What is getting predicted is that while the demand for computing, mathematics and data analysis will grow, there would be a need for human attributes like creativity, critical thinking, influencing, persuasion and negotiation. In this kind of a scenario, how are we prepared to attract, motivate and retain talent across multiple generations and age groups, is a big question in front of all of us.
“Recent studies show that a vast majority of individuals, independently of age, believe their jobs are going to transform (90% of those under 35 years old think so, and 86% of those over 35.)”
We know that it’s not just workers who need to worry about upgrading their skills and competence but its companies too, who are seeking out ways to appeal to a new generation of workers. We are going to work and deal with the multigenerational workforce, Millennials, and Generation Z, who would constitute the majority of workforce. The new generations are already reshaping the relationship between employer and employee. Their ways of working are different and that is something that the organization needs to prepare and be ready for it.
Younger workers are looking for more decentralized environments where they can decide how to get work done, they want to join as “volunteers” or “freelancers” and contribute towards projects rather than being permanently attached to an organization.
Apart from this, we need to create an attractive brand as an employer, in order to attract such talents and at the same time, keep them engaged as well.
Organizations in my view would have some core resources, some fixed-term contractors and some freelancers. Research also proves that the multi-generational workforce yields a stronger pipeline of talent, helps in improving workforce continuity, diversity of talent, stability and overall retention of intellectual capital. Somewhere, a diverse workforce helps in building greater engagement and performance.
So, with such a context and the dynamic world that we are seeing, the real question is how do we prepare the organization for a future set up? How do we challenge ourselves to deviate from conventional rewards practices? What are the disruptive ways of doing things so that we can attract talents as part of our workforce and are able to remain competitive in the market and create a high performing organization? Ultimately, we must survive in this ever so competitive world wherein all the companies are trying to create their mark on the global footprint. In order to cater to these changes in the workplace, some of the rewards priorities in my view should be in the following areas:
Managing Alternative Workforce
Rewards should have plans to manage “gig workers” and “alternative workforce” apart from the core employees who are going to co-exist. Formulation of such contracts, remuneration according to skill sets, payments for the skills and competencies, these are the areas that we need to delve into. It’s not easy to manage as this approach requires very clear and robust processes to create contracts, integrate, manage the workers as projects spin up and then wind down. Apart from this, we need to create an attractive brand as an employer in order to attract such talents and at the same time, keep them engaged as well.
Pay for the Position, Skills & Do More with the Talent
Rewards for resources need to be in line with their skills and what the individual brings as value to the organization. Investing through constant learnings and developing talent which is part of the overall “Total Rewards Strategy” needs to be focused on. Instead of paying for the level and the experience, remuneration needs to be built as per the impact the individual would have on the project/work area. Moreover, recognition would play a major role since its part of a human need and irrespective of either a permanent employee or alternative workforce, we do need to recognize people for their contribution and success.
Create an “Agile Organization”
It’s important to create an agile organization as digital initiatives require such organizational structures which can promote a lot of collaboration and can also enable employees at any level to take a timely decision. Rewards need to look at creating an organization that is away from hierarchical organizational structures but more towards team-based structures, who can manage the agile project-based needs. It would be like creating a team for a production unit, who come together and work on a movie for a few months and then dismantle altogether. Specialists can contribute heavily towards such projects and it also helps in creating organizations wherein decisions can be speeded up. Leaders are everywhere and anyone can lead, is an important aspect today.
The Reward for Team Goals
Rewards programs would need to be designed and delivered to secure desired workforce outcomes in terms of team goals and no longer only on individual goals. One of the valuable assets would be “how do people want to help each other” and how do we pay such people. This becomes the core of the rewards process. We would need to have a clear goal-setting, expectation setting, focused feedback, and then a fair and equitable reward.
Transparency in Rewards
Organizations need to understand that pay is not confidential anymore. With employees sharing what they earn on social media websites such as Glassdoor.com, it’s imperative that rewards can explain clearly the pay philosophy to all its employees in a transparent and meaningful manner. Also, the compensation needs to be very fair and that’s an important aspect of rewards philosophy.
The Wellbeing Of The Employees
Research shows that 28% of employees feel “burned out” all the time. Companies need to rethink how they manage the Wellbeing of their resources. Irrespective of the kind of worker, our rewards practices need to ensure the physical, mental, social and emotional wellbeing of the individuals. Flexibility at work and policies in line with the needs of the employees is a must in today’s context. We need to ensure the element of choice and flexibility in whatever they do, and the organizations and rewards policies need to be supportive of that.
Overall, as Rewards, we need to be creative thinkers and doers! – We need to be mindful of talent, how to value them, where to find them, how to unleash their full potential and how to retain them and keep them engaged. It is important that we foster a climate of respect and fairness for all, including opportunities for meaningful work and a great working environment. We must conquer the skills gap and win the future by rethinking rewards for talents in this ever-dynamic workplace of the future!