Around the globe, one of the greatest challenges in total rewards is attracting and retaining workers with critical and/or specialized skills. In North America, acquiring key talent/lack of available talent ranks as the No. 1 concern of top HR executives, according to the 2007 Mercer Human Resource Consulting study, “The State of HR Transformation.”
Changing Demographics and the Aging Workforce
Employees are generally working longer, which presents numerous challenges. In a study released in August 2007 by Robert Half Management Resources, only one in three Canadians say they plan to quit work entirely once they’re ready to retire.
In addition, Statistics Canada says the age group of 55-64 is growing faster than any other. Now more than ever, employers must consider trying to retain and motivate older workers through recruiting practices, opportunities for training, education and career development; flexible scheduling, job sharing, and phased retirement.
And it’s not just HR professionals that face generational challenges. In the 2007 Mercer Global Business Challenges report, key business leaders identified changing workforce demographics as one of the top overall business challenges in the world today.
With improving technology that allows businesses to remotely connect workers, clients, consultants, customers, etc., more and more companies have operations in multiple locations around the globe.
In a 2007 study of seven European Union countries by Adecco Institute, the majority of respondents ranked only demographic changes higher on the list of worries above globalization.
“Acquiring, organizing and strategically deploying global resources, identifying and securing new markets, meeting the needs of global customers, and creating global alliances and partnerships” have become concerns in boardrooms everywhere, says Mercer’s report.
Ensuring Effectiveness in Total Rewards
Once HR professionals understand the business goals and begin shaping the workforce to accomplish those goals, they can finally begin to look for competitive advantages to make the most of the total rewards program.
According to Steve Gross of Mercer, there are several key questions to ask: “What do I need and what do I value? But even beyond that,” he says. “What can I afford and what can I sustain over the long term?”
And perhaps more apparent than ever due to recent regulations to drive transparency in compensation and perquisites, “What does the shareholder need? I view that as part of the cost equation,” says Gross.
HR professionals can look to many of the HR consulting firms, as well as membership associations such as WorldatWork, for guidance in the many areas of total rewards, including: compensation, benefits, work-life, performance and recognition, and development and career opportunities. But keep in mind that there is no formula for creating the perfect rewards strategy.
Gross analyzes career opportunities; as an example, “If you work in the headquarters office, there is usually more opportunity for growth there than working in a field office. So does the company need to pay more? How does the career path influence pay decisions?”
“The allocation of those (total rewards) resources needs to be focused on the population where you can create the greatest value - where you consider geography, lifecycle of the business, value of the brand, what drives success, etc.,” he says.
Creating the value and a competitive advantage isn’t about checking boxes on a chart. It changes continually and must constantly be assessed and updated.
“Total rewards is always fluid, so there is no end point,” Lindner says. “And it’s important to understand that you can’t just copy someone else’s rewards program. That won’t work for you. You have to build on what your company does right and enhance it from there. That’s when you start to see change and improvement in your workforce. Only then can you truly enhance the business goals.”
Jean Christofferson is the managing editor at WorldatWork and is based in Scottsdale, Ariz. She can be reached at 480-348-7219 or email@example.com. WorldatWork (www.worldatwork.org)?is an international association of human resource professionals and business leaders focused on attracting,?motivating,?and retaining employees. Founded in?1955, WorldatWork provides practitioners with knowledge leadership to effectively design and implement strategies and practices in total rewards – compensation, benefits, work-life, performance and recognition, development, and career opportunities. WorldatWork supports?its 30,000 members and customers in 75 countries with thought leadership, education, publications, research, and certification.
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