Deloitte continues to develop its Total Rewards approach to the benefits market, driven through extensive research into the impacts of this holistic approach. Jason Flynn, a Principal at Deloitte, provides further insights into the firm's thinking on this topic and what the future holds for rewards management:
With the nature of work, the workplace, and the workforce rapidly changing, many high-performing organizations are pivoting to a more strategic view of rewards—looking beyond a paycheck and basic benefits to offer a compelling rewards program that considers the totality of the relationships organizations need to create with their workforce.
In the past, rewards offerings were generally limited to compensation and basic benefits, and rewards functions operated with a primary focus on cost management and operational efficiency. But the evolving demands of today's workforce requires new approaches from business, functional, and HR leaders. Workers' expectations now extend beyond a solid foundation of compensation and benefits to include recognition, development, and a holistic approach to well-being. Creating Total Relationships means building on the rewards foundation to offer personalized, flexible, and customizable experiences differentiated by workers' preferences—and driven by their expectations of the organizations for which they work.
The graphic below depicts a simplified version of the Bersin Total Rewards Framework, developed by our research colleagues here at Deloitte. Even in this high-level form, you can see that the rewards domain is becoming increasingly broad and complex, incorporating a greater variety of offerings, and necessitating enhanced collaboration with partners and stakeholders inside of HR, elsewhere in the organization, and out in the broader ecosystem. But taking this broader view is essential for the rewards function to serve its overarching goal: supporting and driving the business strategy.
Deloitte's 2019 Global Human Capital Trends report shows there is a great opportunity to create competitive advantage through evolved total rewards approaches, as only 11 percent of respondents believed that their rewards systems are highly aligned with their organizational goals. To move forward effectively, organizations should consider focusing on creating effective Total Relationships with the workforce by moving away from designing and delivering rewards as independent pieces that are assembled into a one-size-fits-all approach. Rather, C-suite leadership must now make a concerted effort to drive a unique and differentiated culture of rewards that is grounded in holistic perspectives and informed by a data-driven understanding of workers' needs and preferences.
This shift in mindset around the connection between an organization and its workforce has also led to a re-examination of methods. Relying on decades-old approaches, such as attempts to drive business results through simplistic incentives or disincentives or solely gauging workers needs and expectations with external benchmarks, will miss the mark.
Many high-performing organizations are pivoting to a more strategic view of rewards programs in order to:
—Differentiate themselves as an irresistible place to work
—Maintain the necessary stewardship of the Human Capital Balance Sheet
—Establish an evidence-based approach to rewards
—Acknowledge the worker as the rewards "customer"
Now, more than ever, organizations should create and embed a differentiated experience powered by this change in thinking and approach. It's key to helping your organization curate and engage the high-talent workers the future demands. Such change can be a difficult journey, but one better started sooner than later.
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