In a report launched today, global organisational consultancy, Korn Ferry, reveals how leading organisations are reshaping their approach to reward to retain and engage the best people in the face of impending talent shortages.
Korn Ferry estimates that the global economy will be short of 82.5 million skilled workers by 2030. A new deal for the future of work explores how, against a backdrop of seismic digital and human change, 70 leading organisations from a cross section of industries are exploring alternatives to the traditional “give and get” style of reward in favour of agile business and work-centric approaches. While the organisations who participated show some variation in their chosen approach, all are focusing on three key areas to develop a new deal that works for both them and their people
Re-defining the nature of work
As digital transformation threatens to disempower and disengage employees, leading employers are tackling this problem head-on by promoting technology as a gateway to greater flexibility and more varied and meaningful work. Enabled by technology, 69 per cent of participants surveyed now create flexible teams to resolve specific issues, before disbanding them afterwards, providing employees greater flexibility in the way that they work.
Tackling new talent shortages
In response to dwindling numbers of skilled workers, leading organisations are moving from permanent workforce structures to more ‘liquid’ models, which allow them to access specific skills and resources on demand. For example, one of the participants, Deutsche Telekom, has developed a SharePoint platform where employees can give up to 20 per cent of their time to work on projects outside of their core role.
Leading organisations are modernising the way they structure core elements of the employee offering; how base pay and incentives are defined and how they link to performance management are key factors in ensuring alignment between the evolving landscape and the tangible reward that employees receive. There is also a trend towards modernising the benefits offering to make it more portable, so that it aligns with the more fluid nature of today’s typical career journey.
Anthony McNulty, Associate Client Partner at Korn Ferry, comments,
The relationship between organisation and employee is becoming far more reciprocal. If employers want to attract the best people and get the best from them, they need to offer them something they really want. Pay is important – but so is flexibility and the opportunity to grow. However, what really separates a new deal from a new reward package, is how it’s delivered. Leading organisations are going to new lengths to listen to their employees and constantly evolve their approach in light of what they hear.
Critical to the success of any new design is the manner in which it is delivered to the workforce. The organisations who participated also spoke about the need to ensure the effective delivery of their new deal by:
Leading employers are now using sophisticated analytics to segment their people and create more personalised reward propositions. They’re also increasingly mindful of how their people would like these communicated to them and are starting to measure the impact of strategic changes. While only 27 per cent of those surveyed formally measure the effectiveness of their employee brand proposition against defined targets, 62 per cent are taking the first step towards this by building an awareness of how they are perceived by the external labour market by monitoring third party sites, such as Glassdoor.
Enhancing the employee experience
Creating a truly great employee experience is central to the new deal. Organisations successful in this frequently interact with their employees to understand what they value most. They recognise the importance of culture, brand and most of all purpose. These organisations have commercial goals, but also bigger societal and environmental missions and are adept at uniting individuals behind these and showing how their work contributes to that of the organisation.
Anthony McNulty coomets,
Our research shows that organisations must make some adjustments to stay competitive. While one approach will not work for all – there are three key steps that organisations need to take to develop and deliver a better deal for themselves and their employees. Firstly, organisations need to do all they can to build a better understanding of their current and future workforce. From here they can assess the gaps in their offering preventing them from reaching where they want to be. Lastly employers need to segment their approach so that they’re able to engage with their people in a truly meaningful way.
Interested in employee rewards, employee experience, and the future of work? We recommend the Future of Work Summit 2019, Reward Strategies to Deliver Business Objectives training day, and Creating Value through Employee Experience training day.