Several members of the compensation café – Ann Bares, Jim Brennan and myself – teamed up yesterday for a TLNT webinar to examine where compensation practice is headed in 2012 and beyond. We also looked at 5 trends that are starting to impact how we think about compensation.
Trend 1: The Evolving Role of Salary Surveys - Useful as they are for competitive benchmarking, salary surveys have several known limitations, including:
- Non-US Information – It’s difficult to get reliable non-US salary information, let alone from a single source. As a result, companies end up patch working their US salary survey information with various non-US sources.
- New or Hybrid Jobs – Salary surveys can't keep up with changing jobs. In addition to the dramatic increase of contingent workers and hybrid jobs over the last several years, new jobs exist that didn't exist until recently, i.e., 'social media expert.' Salary surveys alone may not get you to the appropriate salary for these types of jobs.
- Total Rewards -In this day and age of cost cutting it's critical to take a good look at your total rewards offering and use this more holistic view to help determine the right salary level.
What this means: Salary surveys offer a useful starting point for compensation design but there's more work to do on the compensation planning and analysis side in order to avoid over- or under-paying.
Trend 2: A New Kind of Workforce - The modern workforce is global, multi-generational and 20% contingent (expected to double over the next 10 years). Moreover, modern technology has allowed the rise of more flexible work arrangements so quite a few people work away from the office.
What this means: You may have a highly heterogeneous workforce with different locations, priorities and work styles that must somehow fit under one rewards umbrella. Can your HR systems keep up?
Trend 3: Flexible Compensation – If you have a highly dynamic, diverse workforce a static once-a-year compensation and performance review may not be the most appropriate tool to assess workers and allocate rewards.
What this means: Evaluate whether your company's compensation and performance processes are in alignment with your workforce development strategy. To make the most of limited rewards, consider targeting rewards to different workforce populations.
Trend 4: New Business Priorities - Some of our most dearly held assumptions about compensation planning were made when the business had different workforce priorities. Now's a good time to take a critical look at priorities and rewards, for example:
- If developing people is important, does your company reward managers and mentors for developing people?
- If teamwork is important, does your company reward teams for great teamwork?
- If our company values are important, does your company reward individuals for adhering to the core values of the business?
What this means: Give your rewards philosophy a good shake down.
5. Growing Demand for Transparency - Good communication can make the difference in someone's mind between resentment and gratitude. Take credit for the things your company does well and be honest about what you don't offer.
What this means: Every company should offer a total rewards statement to showcase total investment in people, including salary, allowances, bonus, benefits, professional development and even technology.
For more detail on these trends as well as lots of useful information about salary surveys and dynamic compensation planning you can listen to the webinar here.
Picture courtesy columnary.blogspot.com.
Laura Schroeder is a global talent specialist at Workday, headquartered in Pleasanton, CA. She has nearly fifteen years of experience envisioning, 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 (well, kicking things) 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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