You only have to look at some of the leading news stories to
know that compensation is important – Pay inequity, pay equality, raising the
minimum wage, and executive bonuses are all hot topics. At beqom the future of compensation is near
and dear to our hearts. We attend
conferences, speak with consultants, read surveys, articles and blogs and most
importantly listen to our clients to keep our finger on the pulse of what’s
next. This active listening allows us
the luxury of adding new features and functionality to our software, enriching
out services offering and positioning us to continue to provide tremendous
value to exist existing customers and hopefully demonstrate enough value to our
potential clients that they want to partner with us in lieu of our
competition.
One of the important considerations when thinking about the
future of compensation is that the basics will remain the same. The trends that have led us to today will
continue into the future, including the long term theme of the rise and
recognition of the importance of human capital hand in hand with the rise of human
resources and right to be heard at the executive level.
Compensation will continue to be used to attract, retain,
and motivate talent. The other day I
came across a fascinating survey finding challenging some of the commonly held
beliefs of different generations’ core motivations. Every age group of employees listed base pay
as their number one reason that they
joined their current organization and the number
one reason that they were planning on staying. In the same Towers Watson1 survey
27% of employees responded that they would be looking for a job in the next 12
months. That is more than one out of
every four people, base pay if well managed is a key component of a recruitment
and retention strategy as the war for talent heats up.
Compensation of all forms will continue to be used as a
motivational tool to drive behavior and sustained employee engagement. To optimize return on compensation spend
organizations will continue to set goals and incentives, but only a handful of
companies have deployed the process, tools and training to do so effectively
and efficiently.
Compensation, especially in the financial services vertical,
will continue to be shaped by a regulatory environment. Sarbanes Oxley, Frank-Dodd (and the federal
guidance of the quarter) Solvency II, Basel III and individual state and
country laws all have direct or indirect impact to compensation. Regulations aren’t going away and will
continue to drive current and future complexity around compensation
The future of Compensation is a huge topic and I’m going
focus on a few key items that I have the most impact.
Over the course of this multi-part blog post I will cover:
- The most important trends in Compensation (and how companies are reacting)
- Why a Total view of Compensation including HR and Sales Compensation is a winning strategy
- What role Technology is playing in Compensation Management at leading companies
- A primer in Motivational Theory and Behavioral Economics and how the latest research fits into a compensation strategy.
- What’s to come – a far reaching look at how multiple dynamic forces will shape compensation of the future and what your organization needs to be doing today to remain competitive.
Stay tuned!
Please follow me on twitter at @SPMConsulting and if you like what you've read check out more blog posts on how to attract, retrain, and motivate your entire workforce at SPM News
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