No “One Right Answer” for a Universal Issue

Message to HR Leaders: “Be Bold in 2013”Posted by David Lusk and Scott Cole on March 15, 2013

It seems that no matter where in the world a business operates, it isn’t escaping pressures on the people side of the business.

This is the 19th year we have surveyed employers’ priorities for their rewards programs, but it is the first year we have included international employers. This year the Top Five Global Employer Rewards Priorities Survey includes responses from employers in 27 countries in the Americas, Asia Pacific, and EMEA (Europe, Middle East, Africa) regions. Despite sharp differences in economic, political, and geographic challenges among the regions, survey responses showed much less variation in employer concerns about the following challenges:

    1. Attracting, motivating, and retaining employees
    2. Aligning Total Rewards strategy with business strategy and brand
    3. Motivating staff when pay increases are flat or non-existent
    4. Controlling the costs of employee benefits
    5. Realizing appropriate ROI from reward expenditures

We also queried employees about their top personal concerns, and found that employment security ranked in the top three across all regions. Financial concerns rounded out the top three, including employees’ ability to earn additional rewards that allow them to advance in real economic terms at No. 2, and employees’ ability to afford retirement at No. 3. In the U.S. however, two-thirds of respondents ranked their ability to afford retirement as their top concern; 34 percent of U.S. employees plan to delay their retirement age. This is in surprising contrast to other regions, even EMEA where debt crises loom large. There, 16 percent of employees say they plan on delaying retirement, with 17 percent indicating plans to delay it in Asia Pacific.

This financial insecurity seems to drive flight risk—more than one-third of responding employees (38%) said they would consider leaving for another job that provides better benefits (21%) or more stability (17%).

So, zooming out to see the big picture, we have employers concerned about attracting and keeping talent, and employees concerned about keeping their jobs and being financially stable. There’s a generational mix at play here as well, with workforces in China, the U.S., and most of Europe aging, while countries such as India and Brazil are seeing a high influx of young employees. Having four distinct generations in the workforce, each with their own distinct values and expectations presents another dimension to the talent challenge for employers. Not all the employees we surveyed think their employers are handling that challenge well. Only 61 percent of global respondents either somewhat agree or strongly agree that their organization’s leadership team understands the differing generational values in the workforce; and more than one in four respondents indicate their organization does not have the correct Total Rewards strategy in place to recruit and retain the talent needed in their workforce.

What are some takeaways for employers?

  • Understand your employees’ concerns. Global surveys are a good starting point, but may not be totally in tune with your workforce’s concerns or specific generational mix.
  • Calibrate talent and rewards strategies and retirement and pension programs to meet generational expectations of extended employment. This can also be an astute retention strategy.
  • Redefine total rewards programs to motivate, attract, and retain employees at every stage in their career.
  • Understand that employees are consumers who have choices. Offering training, leadership and mentoring programs, and other nontraditional forms of rewards and recognition can help establish your organization as an employer of choice.

David Lusk
David Lusk is a principal with Deloitte Consulting LLP—and the former National Practice Leader for Employer Health Care consulting. For over 12 years, he was the West Region Total Rewards service line leader. David has spent the last 29 years serving clients and leading project teams across the US primarily focusing on retirement, health and welfare benefit purchasing, design, finance, and employee engagement strategies for large plan sponsors.
Scott Cole
Scott Cole is a senior manager with Deloitte Consulting LLP. Scott has 14 years of experience in HR service delivery, outsourcing advisory, and employee benefits consulting. He recently spent two years leading Deloitte’s Total Rewards consulting practice in India, where he worked with both US and global employers on Rewards design and delivery, including broad-based and executive compensation, sales force effectiveness, retirement, health and welfare, and employee benefits outsourcing.
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