Total Rewards 2030 WHAT TO EXPECT IN THE
- Slides: 26
Total Rewards 2030 WHAT TO EXPECT IN THE NEXT 10 YEARS Gordon Frost, Partner & Market Leader, Mercer
TOTAL REWARDS 2030 WHAT TO EXPECT IN THE NEXT 10 YEARS © MERCER 2018 2
BEFORE WE START: Meet Zoey: Your Employee of the Future © MERCER 2018 3
TODAY’S SESSION 1. The World Zoey Lives in: 2. The Future of Zoey’s Total Rewards 3. Empathy: Understand What Zoey Needs 4. Emotional Connection: Treat Zoey as a Consumer 5. Q&A © MERCER 2018 4
THE WORLD ZOEY LIVES IN… © MERCER 2018 5
MACRO TRENDS IMPACTING CANADIANS GLOBALIZATION AGEING POPULATION WORKFORCE DIVERSITY WELLNESS BIG DATA SOCIAL MEDIA & MOBILE PLATFORMS MOBILITY ALGORITHMS REPLACING ADMINISTRATION WAR FOR TALENT EMPLOYEE ACCOUNTABILITY / STRESS ON DEMAND LABOUR HUMAN CAPITAL MANAGEMENT TECHNOLOGY © MERCER 2018 6
THESE CHANGES ARE RAISING CRITICAL QUESTIONS… — BUSINESS LEADERS — — HR — — EMPLOYEE — How can we build for an unknown future? How can we attract & retain tomorrow’s workforce? What does career success mean in today’s world? STRATEGY TALENT MANAGEMENT CAREER ASPIRATIONS CAPABILITIES EVP / TOTAL REWARDS WORK & LIFE DEMANDS LEADERSHIP & CULTURE ENGAGEMENT & EMPOWERMENT SAVINGS & RETIREMENT © MERCER 2018 7
THE FUTURE OF ZOEY'S TOTAL REWARDS © MERCER 2018 8
HOW IS THE VALUE PROPOSITION EVOLVING? Loyalty Contract (20 th Century) Engagement Contract (Today) The Thrive Contract (The Next Chapter) Basic Needs: Pay, Benefits, Security Psychological Needs: Achievement, Camaraderie, Equity Growth Needs: Purpose, Meaning, Impact Workers are assets to be retained Employees are assets to be acquired and optimized People and machines as value creators to invest in Pay and benefits for time and output Broader set of rewards (pay, benefits, career, experiences) in exchange for organizational engagement Personalized rewards in exchange for a wide range of contributions © MERCER 2018 © MERCER 9
ONLY 2 IN 5 EMPLOYEES SAY THEIR COMPANY HAS A COMPELLING DIFFERENTIATED VALUE PROPOSITION © MERCER 2018 10
THE FUTURE OF TOTAL REWARDS Give me a chance to contribute to a greater purpose UE 97% IQ UN TIA TE D PURPOSE ER EN EXPERIENTIAL CAREERS WELLBEING ITI VE DI FF OF EMPLOYEES WANT TO BE RECOGNIZED AND REWARDED IN DIFFERENT WAYS EMOTIONAL CO MP ET CONTRACTUAL COMPENSATION © MERCER 2018 11 BENEFITS
THE FUTURE OF TOTAL REWARDS PERSONALIZED TOTAL REWARDS UN IQ UE EMPATHY: Harvest the power of analytics to understand Zoey’s needs PURPOSE CAREERS WELLBEING Personalized rewards in exchange for a wide range of contributions MP CO EMOTIONAL CONNECTION: Create an experience ET ITI VE DI FF ER EN TIA TE D Growth Needs: Purpose, Meaning, Impact COMPENSATION © MERCER 2018 12 BENEFITS Healthy, agile and productive
EMPATHY © MERCER 2018 13
WHICH ELEMENTS ARE MOST IMPORTANT TO ZOE? Career advancement Retirement savings/ pension plan Base pay Bonus / other incentives Training opportunities Healthcare Benefits Flexible work schedule Working for respectable organization Paid time off © MERCER 2018 14 Type of work
WHICH ELEMENTS ARE MOST IMPORTANT TO ZOE? A GLOBAL WORKFORCE HAS DIFFERENT PRIORITIES… China India Germany UK Brazil USA* Canada* Rank 1 Career advancement Base pay Rank 2 Base pay Type of work Base pay Retirement savings/ pension plan Rank 3 Supplemental retirement savings plan Training opportunities Bonus / other incentives Training opportunities Healthcare Benefits Rank 4 Training opportunities Type of work Flexible work schedule Retirement savings/ pension plan Type of work Bonus / other incentives Paid time off Rank 5 Bonus / other incentives Working for respectable organization Flexible work schedule Health insurance with broad coverage Paid time off Flexible work schedule Rank 6 Supplemental medical insurance coverage Bonus / other incentives Training opportunities Paid time off Flexible work schedule Type of work Note: *Represents 2015 data. All other are 2011 data. Source: Mercer’s © MERCER 2018 What’s Working Survey (between 2, 000 and 2, 400 respondents per country) 15
WHICH ELEMENTS ARE MOST IMPORTANT TO ZOE? … AS DO DIFFERENT DEMOGRAPHIC SEGMENTS Millennials (Age 34) Gen X (Age 35– 50) Baby Boomers (Age 51– 69) 1 Base pay 2 Career opportunities Retirement plan Type of work 3 Retirement plan Health care benefits Incentive pay 4 Health care benefits Incentive pay Working for org. I respect 5 Incentive pay Paid time off Retirement plan 6 Flexible schedule Type of work Flexible schedule 7 Paid time off Type of work Flexible schedule Health care benefits 8 Type of work Career opportunities Working for org. I respect Paid time off 9 Working for org. I respect Career opportunities Training opportunities 10 Training opportunities Career opportunities Source: Mercer “Inside Employee Minds” 2015 © MERCER 2018 16 Traditionalists (Age 70– 87)
HARVEST THE POWER OF ANALYTICS TO UNDERSTAND ZOEY’S NEEDS Clustering Factors XYZ Workforce Segments Median Age Fresh Ambitions Additional attributes Home Area Median Years Median Base Median of Service Pay Household Income % Female % Salaried % Married % with Employee + Family Health Coverage Count 34 2 $45 k $49 k 70% 38% 49% 31% 322 34 3 $56 k $75 k 67% 57% 35% 374 Family First 45 8 $88 k $106 k 59% 86% 83% 51% 133 Mid Career Managers 48 9 $121 k $75 k 45% 100% 80% 55% 217 Leaders 50 7 $311 k $84 k 25% 100% 71% 24 Starting Over in the 3 rd Act 50 6 $60 k $75 k 86% 54% 67% 38% 311 Urban Realists 51 13 $54 k $52 k 84% 38% 63% 29% 350 Long Term Loyals 55 29 $65 k $64 k 85% 52% 74% 34% 288 Total 46 8 $60 k $68 k 72% 56% 65% 37% 2, 109 Z O E Y Strivers 8 PERSONAS IDENTIFIED FRESH AMBITIONS STRIVERS Just getting started in a support role in my profession © MERCER 2018 ZOEY FAMILY FIRST MID-CAREER MANAGERS LEADERS STARTING OVER URBAN REALISTS LONG-TERM LOYALS Married, dual-earner house Married managers, breadwinners VPs and Leaders Starting a new life and career City dweller living within my means Career Employees 17
HOW DATA CAN HELP TAILORING THE INDIVIDUAL VALUE PROPOSITION PLAN DESIGN EMPLOYEE NEEDS Competitiveness (external benchmarking) Importance/ Satisfaction (conjoint survey) Utilization/Cost (benefit provider) Impact on Engagement (predictive analysis) PERSONAS © MERCER 2018 18
HARVEST THE POWER OF ANALYTICS TO UNDERSTAND ZOEY’S NEEDS Persona 1 Persona 2 Persona 3 Persona 4 © MERCER 2018 19
CONNECTING THE DOTS TO CREATE A UNIQUE TOTAL REWARDS OFFERING FOR ZOEY REWARD ELEMENT IMPORTANCE SATISFACTION PROGRAM UTILIZATION COST COMPETITIVENESS ENGAGEMENT IMPACT ACTION BASE PAY $$$ Maintain investment INCENTIVE PROGRAMS $$ Focused investment HEALTH BENEFITS $$$ Reduce / limit investment RETIREMENT BENEFITS $$$ Maintain investment CAREER $$ Focused investment WELL-BEING PROGRAMS $$ Maintain investment FLEXIBILITY PROGRAMS $ Focused investment © MERCER 2018 ABOVE AVERAGE HIGH $$$ HIGH ABOVE MARKET AVERAGE MODERATE $$ MODERATE AT MARKET NO RELATION BELOW AVERAGE LOW $ LOW BELOW MARKET REDUCER 20 DRIVER
EMOTIONAL CONNECTION © MERCER 2018 21
THINK ABOUT HOW TO TRANSFORM A SLOPPY TOTAL REWARDS JOURNEY TO A GREAT EXPERIENCE FOR ZOEY Employment Offer “Mom, I got the job!” Onboarding / TR Program Enrollment “I have to navigate four different clumsy web pages…” © MERCER 2018 22 Performance Management / Compensation Review Career Management “I am confused, my manager was not very clear on my goals” “I don’t feel valued and don’t know what my purpose is…”
CREATE AN EMOTIONAL CONNECTION EMPOWERING: SUPPORT ME DO MY JOB SMARTLY ENGAGING: CONNECT WITH ME AS AN INDIVIDUAL “I’m confident” “I get it” “I feel appreciated” I have what I need to do my job and I know where to find people/information to help me take action It’s simple. This experience feels as modern and familiar as the consumer tools/sites I already use I know how to contribute and I can see the value of working here - both now and in the future ENABLED BY A DIGITAL PLATFORM Consumer grade experience © MERCER 2018 Private and secure data T O T A L R E W A R D S Conversational systems A N D W O R K 23 E N V I R O N M E N T Relevant content
Hi Zoey TOTAL REWARDS DIGITAL DELIVERY Centralized Portal • Personalized dashboards • Quick links for ease of use • Second-level dashboards for more customization • Full access through preferred channels User Experience and Access Social Media © MERCER 2018 24 Web Email Chat Call Centre
CALL TO ACTION: 3 2 UN IQ UE 1 D CAREERS WELLBEING CO MP ET ITI VE DI FF ER EN TIA TE PURPOSE Know your data and harness its power (empathy) COMPENSATION BENEFITS Define your total rewards strategy and focus on personalization Effective delivery and emotional connection / quick access THRIVING ZOEY © MERCER 2018 25 25
Q&A gordon. frost@mercer. com © MERCER 2018 26
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