The world of work is evolving rapidly and along with it, employee demands and remuneration practices.
“Companies that want to stay ahead of the talent race need to keep abreast of these changes and adapt accordingly,” says Dr Mark Bussin, master reward specialist and president of the South African Reward Association (SARA).
Dr Bussin says these are the top 10 global trends impacting remuneration policies and practices:
- Remote and hybrid work are becoming the norm rather than the exception. Companies need to develop flexible reward policies for this model to succeed, especially where employees in different regions face cost-of-living challenges. A set remuneration package that ignores location could drive critical talent away.
- Pay transparency and equity are seeing greater demand from industry influencers and lawmakers. What companies pay and how they arrive at those figures will come under more intense scrutiny, and they’ll be expected to expose, explain and correct gender, race and other pay gaps.
- Focus on holistic total rewards continues to grow, not just in terms of non-monetary benefits above base salary, like wellness programmes, flexible working hours or career opportunities. Younger workers also want to contribute to societal solutions through employers who are proactive about their concerns.
- Skill-based pay and agile remuneration see companies focusing rewards on the skills employees bring to the business rather than their job title, and creating agile reward structures that meet the enterprise’s rapidly changing talent requirements. This motivates employees to develop in-demand skills that evolve with their employer’s needs.
- Variable pay and performance based remuneration rewards employees for their performance in relation to their organisation’s success, not just their individual efforts. Bonuses, profit sharing, share options, incentive pay and other schemes can all motivate workers to focus on corporate outcomes.
- AI and data analytics are already being used extensively to optimise rewards and will continue to shape the future of remuneration. They allow HR teams to develop data-driven remuneration packages that are fair, competitive and aligned to enterprise strategy.
- Flexible benefits and reward personalisation mean the days of fixed, one-size-fits-all benefits are numbered. Increasingly, benefits are tailored to each employee’s particular needs and adjusted as their life circumstances change, such as swapping unnecessary medical benefits for more take-home pay or vice versa.
- Global mobility and expatriate remuneration have changed significantly over the past few years. Remote working, digital transformation and other global developments have unearthed new opportunities and challenges for employers, creating the need for refined remote worker and expatriate remuneration models.
- A growing focus on wellbeing and mental health benefits comes from the realisation that, in today’s fast-paced, always-connected digital world, employees are under greater stress than ever. Mental health interventions, support programmes and compassionate allowances are essential to maintaining productivity in the workplace.
- Sustainability and ethical remuneration are becoming increasingly more important to employees, concern groups and lawmakers alike. To attract and retain talent, enterprises have to offer fair and equitable remuneration while aligning their business strategy and practices with meaningful corporate social responsibility goals.
“These concepts will become more business-critical in the coming years and organisations who depend on skills excellence must embed them deeply in their reward strategy,” says Dr Bussin.