Prediction: A tight talent market will force differentiation in rewards

Posted by Pete DeBellis on December 6, 2018.

Organizations are in an uphill battle for talent. With less than one job-seeker per job opening in the U.S. at present,1 and a scarcity of qualified talent, organizations need to make substantial changes to attract and retain the talent they need to maintain productivity and drive innovation. Rewards, of course, are one of the most important ways that organizations attract talent. But the days of offering talent the same rewards as competitors have passed. The current job market demands differentiated rewards—by employee, by life stage, and by each organization’s culture and values.

As the market tightens and rewards offerings become integral to your employer brand, prospective workforces will be demanding that your offerings include a focus on their well-being and productivity. In 2019, organizations will begin to distinguish their rewards offerings in two key ways

Rewards will become crucial to the employment brand
High-performing organizations will firmly ground their rewards strategies in their overarching business goals, and develop clear communications to help current and prospective employees understand how these elements align as part of their employment branding. For example, organizations that need to attract large numbers of highly educated early-career workers might extol their innovative approach to helping employees deal with student debt. An organization with a business model built on agility, meanwhile, might highlight its more frequent compensation review cycles and agile rewards offerings compared to organizations with a more typical year-end process.

In these communications, organizations really have an opportunity to shine a spotlight on what makes them unique: their cultures, their objectives, their work environments, the opportunities for growth and development in those environments—and the ways in which employees will be rewarded for doing so. And it is, in part, through the diversity of those rewards offerings that the authenticity of these organizations will shine through. As evidence of this point, our 2018 High-Impact Total Rewards research found that high-performing organizations are 5.6 times more likely than low-performing organizations to say that their rewards brand reflects their organization’s culture to a great or very great extent.2

Talent acquisition colleagues will be key collaborators in the effort to differentiate the employment brand based on rewards. They can help rewards leaders sense the market and stay aligned with what candidates want and need from an employer, while ensuring that candidates are being presented a rewards brand that accurately represents the internal realities at the organization.

From a tactical perspective, communications across multiple channels—internal communications, social media, job boards and recruiting collateral, and even the chatbots built into applicant tracking and broader HR systems—need to consistently deliver clear messaging to employees and candidates about the entirety of the total rewards offering. Organizations should tailor these communications to provide employees with what they need, when they need it.

These innovations will better position organizations to maximize the return on their rewards investments and to enjoy higher rates of employee retention and engagement across the enterprise.

Analytics will empower companies to personalize their rewards offerings
High-performing rewards functions know that developing a true understanding of employees’ needs and wants is the foundation of an effective and differentiated rewards program. Next year, we’ll see these functions launch their organizations toward higher rates of retention and engagement by personalizing rewards offerings to better “fit” their workforces.

They’ll do so by using advanced analytics to understand utilization of and return on investment for their current offerings, mining their people data to define the various segments that exist within their workforces, and then determining the characteristics and preferences of each segment or “persona” using rewards optimization surveys and other methods to collect employee input. These persona-based insights, in turn, will help organizations develop a deeper understanding of what their workforce values and truly needs—and how to connect with these personas through their rewards offerings. Our 2018 High-Impact Total Rewards research also found that high-performing organizations are 6.2 times more likely than low-performing organizations to use analytics to evaluate the impact of their rewards offerings.3

These high-performing functions also know that the insights these personas provide enable them to be more forward-looking through the creation of employee journey maps. These can illuminate current needs and wants, as well as allow the organization to prepare for the future, based on predictable internal events throughout the employee life cycle as well as those in their lives outside of work. While the days of truly personalized rewards offerings—different packages for each individual employee and tradeoffs across various rewards elements—won’t arrive in 2019 due to a variety of administrative and regulatory impediments, the personalization of rewards by actual employee populations (as opposed to broader market survey data, industry-level insights, or generational stereotypes) will be an important step in that direction.

Looking ahead
As we’ve seen over and over again, most employees just don’t like their rewards programs. Organizations and savvy HR leaders need to recognize that when done well, rewards offerings can play a huge role in attracting talent and keeping it happy—and in-house. We’ll see some organizations take a giant step forward in 2019—away from the pack—toward better hiring metrics and greater retention and engagement rates.

For our part, BersinTM, Deloitte Consulting LLP will continue to focus on this topic broadly in the coming months, as well as keep an eye on specific potentially differentiating rewards offerings such as holistic worker well-being, student debt assistance, experiential rewards, and other unique and memorable offerings.

Every day from November 27 through December 6, Bersin will be sharing perspectives on the most timely, relevant, and interesting developments for HR professionals to watch in 2019. Check back every day, or visit on December 18 for a consolidated report with all of the predictions.

Peter DeBellisPeter DeBellis, is the total rewards research leader for Bersin, Deloitte Consulting LLP.

1 Job Openings and Labor Turnover Survey Highlights, September 2018, U.S. Bureau of Labor Statistics, 2018,
2 High-Impact Total Rewards research, Bersin, Deloitte Consulting LLP, 2018.
3 Ibid.

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