“Getting compensation right is becoming increasingly important as employers look to drive higher levels of performance, attract and retain talent, and make fair pay decisions,” said Sandra McLellan, of Rewards, Willis Towers Watson.
A recent survey revealed several factors that are prompting employers to make or consider changes to their compensation programs, including cost (71%), manager feedback (63%), changing marketplace (61%) and feedback from employees (59%). Changes respondents are planning to make this year or consider over the next three years include:
- Base pay and annual incentive plans: The changing nature of work and new skills requirements are fueling employers to reassess these programs. 45% are planning on or considering redesigning annual incentive plans; 37% are planning on or considering changing criteria for salary increases.
- Heightened pay decision transparency: A whopping 53% are planning on or considering increasing the level of transparency around pay decisions.
- New technology: Employers are recognizing the need for new technology to support pay decisions. More than half are planning on or considering introducing new technology. Smaller companies tend to work with compensation experts to customize a plan that fits their needs.
- Recognition programs on the rise: These programs are appealing to employers with limited budgets and offer a way to provide on-the-spot personalized rewards. 53 percent are planning on or considering adding a recognition program.
60% of U.S. employers are planning to take some action this year to prevent bias in hiring and pay decisions. Several areas are targeted for greater focus.
- Reevaluating their recruitment and promotion processes,
- conducting a gender pay or pay equity diagnostic, and
- increasing communication of policies and benefits that promote an inclusive culture.
When was the last time you reviewed your compensation plan? Annual reviews are critical in California’s high employment climate. Let us help you create a compensation plan that works and doesn’t break the bank.
Source: Rewards, Willis Towers Watson