By: Neil Mrkvicka
Attracting, motivating and retaining talent ranks as both top priority and top challenge for HR leadership over the next three years.
The 2014 Global Top Five Total Rewards Priorities Survey asked employers in 22 countries to rank the top five priorities for 2014 and answer a series of questions on their approaches to total rewards.
The top five priorities for 2014 are:
- Aligning total rewards with business strategy by attracting, motivating and retaining employees
- Costs of providing benefits to employees
- Motivating staff when pay increases are flat or nonexistent
- Demonstrating appropriate return on investment for reward expenditures
- Creating a rewards program that reflects the culture and goals of the organization.
Conducted globally for the second year, the survey from Deloitte, the International Society of Certified Employee Benefit Specialists (ISCEBS) and the International Foundation of Employee Benefit Plans is an annual barometer of talent and rewards management challenges.
The priorities list remained fairly stable from 2013 to 2014. One noteworthy change is that the cost of providing benefits to employees jumped from the fourth place in 2013 to second this year. This also was one of the key differences in priorities among the geographies—The United States places a greater emphasis on the cost of providing benefits, particularly health care benefits compared to other parts of the world.
Looking to the future, shortage, motivation and retention of qualified talent is anticipated to be the number one challenge organizations will face in the next three years.
One survey finding of concern was that only half (50%) of employers agreed with the statement, “My organization has the correct total rewards strategy in place to recruit and retain the talent we need in our workforce.” Overall, this suggests organizations continue to struggle with finding the right way to align total rewards with their overall business strategy; however, many organizations are taking action to combat this trend. The top adjustment being made by employers regarding total rewards is increasing emphasis on wellness and disease management initiatives.
Compensation programs continue to garner significant attention as they are generally the most visible and costly component of a rewards strategy. Organizations looking to redesign their compensation programs are most likely to focus on variable pay and their overall compensation strategy.
Increasing emphasis on employee learning and development programs is also one of the top adjustments employers plan to make. This reflects recognition of the value employees place on career development, as well as the continued need for employers to train and educate their workforce to stay current and competitive and develop the next generation of leaders. In addition, the complexity of communication and education efforts continues to escalate as aging workforces worldwide are increasingly concerned with retirement security and health.
In an ever-changing economic environment, organizations must continue to review the total rewards programs they have in place to understand the return on investment for this area of significant cost. The best companies will continuously evaluate whether specific rewards programs are good fits for their employees, gauging the value the employees place on the benefits.