WorldatWork and Towers Watson recently published a comprehensive summary of global talent and rewards trends based on a survey of 1176 HR professionals across industries and regions.
Although I recommend reading the entire study I found several trends particularly interesting for 2011 planning.
The "big" trend is that companies are trying to create globally consistent talent and rewards strategies that are flexible enough to address local needs. The motivation for doing this is to improve efficiency and alignment while reducing costs and risks.
To give you an idea of why global consistency is desirable, fellow Cafe author Derek Irvine recently documented how managers in a company that didn’t have a global rewards policy expensed recognition gifts, which unfortunately bypassed local taxation regulations.
There are several other global trends to keep in mind as we head into 2011:
Trend #1: Top talent is still in short supply – Although everyone has a different definition of ‘top talent’, for our purposes let’s define it as people who have whatever hard-to-find skills you are currently looking for.
US company decision makers feel understandably cautious in the wake of the financial crisis and a bit giddy now that they’ve seen how much money they can save by not paying salaries. Unfortunately, as addictive as not paying salaries can be, not hiring the skills you need can erode the long term value of your company.
Outside the US, companies are starting to invest more in employee development to ensure the availability of critical skills, which means that a passive workforce development strategy may erode US companies’ attractiveness as an employer outside in tighter labor markets.
Bottom line: Companies will have to put a stake in the ground around talent management in order to remain globally competitive.
Trend #2: Fewer advancement opportunities – When teams are smaller and the company isn’t growing there’s no need for new leaders to head up dynamic new teams.
Still, you’d think in a smaller, leaner company there’d be more growth and leadership opportunities to go around. It almost looks like people are hoarding work in preparation for the next time the company decides to lay off a third of the workforce.
Bottom line: Scarcity of development opportunities creates a negative incentive for team building and information sharing, which are critical for innovation.
Trend #3: Lower performing companies don’t differentiate rewards – There you have it, a non-differentiated ‘peanut butter’ approach to rewards is officially linked to lower performance. Another interesting trend is that high performing companies are increasing their STI performance targets this year, which means they expect to pay out less next year.
Bottom line: Differentiate more, demand more and pay less, seems to be a winning strategy.
Trend #4: Cash matters again - At a certain level more money won't increase engagement and other factors become more important.
However, the current workforce feels underpaid around the globe, especially in the US where the gap between what people expect and what they get is about 51%.
Bottom line: Now may be a good time to offer more money.
A final word to the wise: According to the survey everyone around the globe cares about competitive base pay, challenging work, development opportunities and convenient work location.
These are the things you want to focus on in 2011.
Picture courtesy of profileexecutive.com.
Laura Schroeder is a Compensation Strategist at Workday, headquartered in Pleasanton, CA. She has nearly fifteen years of experience designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and holds a certificate in Strategic Human Resources Practices from Cornell University. Her articles and interviews on HCM topics have been published in the US, Europe and Asia. She lives in Munich, Germany and enjoys cooking, reading, writing, kick boxing and spending time with friends and family. If you want to read more from Laura, check out her talent management blog Working Girl or follow her on Twitter @WorkGal.
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