Futuristic Rewards Program
In continuation to the article on recruitment trends of future, in this article, I’ve penned down some of the ideas and analysis on how the entire compensation and benefits vertical will pan out in the future.
An organization’s compensation & benefits strategy is typically a reflection of overall Employee Value Proposition that the organization offers. And so majority of the organizations so far have deployed a unique strategy dependent on factors like industry it is operating in, overall business strategy, current position in the growth trajectory, type of talent it is trying to attract and retain, labour market and the culture. With changing times and specifically due to the current situation, the future is getting closer day-by-day. And so there is a possibility even after having a unique rewards strategy at an organization level, companies will have to deploy even more agile and personalized rewards systems at an individual level. Progressive organizations have already started moving in this direction. In fact, as compared to rest of the market, these organizations are extra focused on the whole employee experience piece, particularly for pivotal talent.
Skill based compensation especially for contingent workforce will pick up. Apart from monetary compensation, a lot of innovation in benefits and perks will come into picture for them. The benefits that are usually provided to full-time employees will not work as is for gig employees. Though health insurance and pensions are not provided to them, but with their increasing percentage in overall workforce, some amount of basic coverage will have to be provided. For example, companies can let gig workers’ pay monthly premiums to participate in a group health plan, which is often less expensive than the cost of individual market coverage. If not directly, these benefits can be provided via a temp staffing agency though it will not cover independent contractors. Apart from insurance and pensions, which provides a sense of security, bonus is another way to motivate and reward contingent workers. Bonuses can be offered for high-quality work, early delivery of a project, controlling costs or for coming up with a disruptive solution. Flexibility is something that is inherent in the definition of gig workers and so giving them the freedom to take time-off as and when they need is not something unthinkable. A not so new concept called Portable Benefits can also benefit non-traditional workforce. A pretty well-known example of a portable benefit could be pension plans or Provident Fund where it is linked to an individual rather than a particular employer and is portable and prorated; which can be taken from job to job without interruption in coverage or loss of funding.
Advocates of salary transparency will also gain momentum which will lead to normalization of absurd pay packages and a lot of firms will move to output based compensation model.