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Talent Management & Rewards India Report - Towers Watson
 

Talent Management & Rewards India Report - Towers Watson

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Towers Watson’s 17th consecutive Talent Management and Rewards Study reveals the demand for the right talent is as strong as ever — and the stakes for attracting, keeping and engaging that talent ...

Towers Watson’s 17th consecutive Talent Management and Rewards Study reveals the demand for the right talent is as strong as ever — and the stakes for attracting, keeping and engaging that talent are high. Not in recent history have we seen such rapid movement in economies, and workforce demand and availability. Even as organisations continue to rein in operational costs, many push expectations for employee and financial performance ever higher. As a result, the workforce is often providing greater efforts without the promise of greater rewards.

In total, 1,605 respondents from across the globe including over a hundred from India, across sectors and industries, participated in the study. The research documents companies’ efforts to tackle the hard work of fine-tuning their employee value proposition (EVP) and total rewards strategy for global competition — and the demonstrable, significant and sustainable rewards of doing so.

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    Talent Management & Rewards India Report - Towers Watson Talent Management & Rewards India Report - Towers Watson Document Transcript

    • The Next High-Stakes Quest Balancing Employer and Employee Priorities 2012-2013 Global Talent Management and Rewards Study India Report
    • The Next High-Stakes Quest Balancing Employer and Employee Priorities Table of Contents Introduction 4 Attraction and Retention Trends 5 Drivers of Attraction and Retention 6 Trends in Hiring and Attrition 6 Talent Mobility 6 Employee Value Proposition and Total Rewards 7 Rewards 8 Use of Social Media 9 Conclusion 10 About the Study 11 3
    • 4 towerswatson.com Introduction Figure 1. Macro-economic environment affecting both employers and employees Employer Challenges Employee Concerns Intense pressure to maintain costs Additional reasons they join - job security and career development opportunities - a challenge given volatile business conditions Not readily able to meet employee preferences for job and financial security Top reason they join and leave - base pay - mismatch with organisational cost management Pressure to increase productivity Working more hours than usual and don’t expect that to change Talent skills misaligned with company needs Leaders are ill-equipped in this new enviornment Maintain a Total Rewards portfolio that is both competitive and part of a compelling employement deal May not have appropriate skills/training (or access to training) for available roles Doubts about leadership; lack of trust and confidence and perceived lack of interest in employee well-being Stress and anxiety about the future are common; decisions to stay driven by quality of work experience overall In today’s volatile global economy, we are seeing massive movements in economies, workforce demand and availability, and new issues confronting employers. Along with accelerating changes in talent markets and workforce demographics that affect how employers find and keep employees, cost challenges continue to play a major role. In fact, for many companies it has never been more important to get the balance between employer and employee priorities right. Towers Watson’s 2012 Talent Management and Rewards Survey findings highlight a prescription for organisations to realise healthier financial results, improved employee engagement, and an easier time attracting and retaining people with the skills they need, while workers get what they need.
    • Headline: 17/20 White Lorem ipsum dolor sit amet, Attraction and Retention Trendsi p AP Developed AP Overall Global India Critical Skill Employees High Potential Employees Top Performing Employees Recent University Graduates 71% 70% 18%59%60% 84% 79% 45%64% 24% 60% 60% 27% 80% 79% 22% 92% 86% 84% 29% Global AP Overall AP Developed AP Fast-growing India 56% 70% 58% 75% 86% 54% 67% 51% 75% 80% 50% 64% 50% 71% 77% 20% 26% 19% 29% 56% Figure 3. Percentage of organisations experiencing retention problems Figure 2. Percentage of organisations experiencing attraction problems Consistently around the world, nearly three in four organisations report moderate to great challenges attracting critical-skill employees and more than half report difficulty retaining them. Despite growth rates moderating and a large workforce, 92% of Indian employers report challenges in attracting critical-skill employees as compared to the global average of 71%. Retaining critical-skill employees too remains a concern as 86% Indian companies report challenges retaining them as compared to the global average of 56%. On recent university graduates, the survey finds that there has been some improvement in attracting this segment of employees but retaining them continues to be a challenge area. Over half the Indian companies reported challenges retaining recent graduates as compared to the global average of 20%. Recent University Graduates Top Performing Employees High Potential Employees Critical Skill Employees AP Fast growing 5
    • 6 towerswatson.com Drivers of Attraction and Retention While considering a potential employer, employees in India value job security over career advancement opportunities (ranked 2nd) and base pay/salary (ranked 3rd). Employers too seem to have caught on to the pulse of the employees and at the same time give due weightage to providing a challenging work environment. On retention drivers, there seems better alignment between employee and employer, although employers overvalue a few items relative to employees. Particularly in India, both view base pay and career advancement opportunities as the key drivers followed closely by convenience of work location and learning and development opportunities. India fared better than the regional and global counterparts in providing improved career advancement opportunities in sync with the employee’s top attraction and retention drivers. Sixty three per cent Indian employers felt that over the past 12 months career advancement opportunities for most employees in their organisation had improved as compared to the global and AP overall average of 39% and 42% respectively. Trends in Hiring and Attrition Forty one percent of Indian employers have opined that attrition levels have reduced over the past 12 months as compared to the AP average of 25% and global average of 19%. While 58% of India employers said hiring activity had increased in the past 12 months, 48% in AP and 51% globally felt likewise. Talent Mobility According to the 2012 Global Talent Mobility Study by Towers Watson and workforce mobility association Worldwide ERC®, over the next two to three years, nearly half the multinationals surveyed expect to increase traditional international assignments. Because of the many talent mobility challenges organisations face, they need to balance their selection priorities. For example, almost seven in 10 employers (69%) globally cite prohibitive costs as a major challenge, while more than half mention high housing costs (55%) or cost-of-living allowances (51%). Indian companies have evidently taken the lead over their global counterparts when it comes to formally identifying employees who are internationally mobile, developing special programmes to promote international mobility and training managers to manage cross-cultural teams. Further, 74% of India companies said employees in their organisation work together as a team with colleagues from different countries or cultures as compared to the AP average of 58% and global average of 65 per cent. The New Normal - working and doing more with less in the workplace Globally, employees have been expected to work longer and rest less and this trend seems likely to continue. Just over a quarter of the employers surveyed in India said employees have taken less vacation/personal time off in the past 3 years and expect employees will work more hours than normal over the next three years. Employees have been working more hours than normal in the past 3 years Global: 53% India: 38% Expect employees will work more hours than normal next three years Global: 43% India: 28% Stable hiring and moderate turnover in India has been instrumental in creating a stable work environment in spite of the economic pressures of inflation and lowered rates of GDP growth 92% Indian employers report challenges in attracting critical-skill employees, while 86% report challenges retaining them
    • Document Title 7 My organisation has a formally articulated employee value proposition (EVP) My organisation has a formally articulated total rewards strategy My organisation articulates specific objectives for each talent management and reward programme that are aligned with our EVP Our business strategy and objectives inform the talent management and reward programmes at my organisation My organisation modifies our total reward programme to appeal to employees in different generations Global AP Overall AP Developed AP Fast- Growing India 35% 51% 27% 47% 22% 39% 26% 46% 42% 51% 34% 45% 29% 33% 19% 32% 26% 58% 41% 51% 30% 56% 45% 59% 44% Employee Value Proposition and Total Rewards Part of the solution, for companies and workers alike, lies in the articulation and execution of a strategically designed employee value proposition (EVP). A formal EVP and associated total rewards strategy will support the attraction, retention and engagement levels among employees needed to drive business success. The EVP is still a relatively new concept for many organisations, but Towers Watson research clearly indicates the return on investment from taking the critical first steps associated with articulating a formal EVP and total rewards strategy. This year’s research highlights that Indian organisations are taking a lead in design and delivery of their Total Reward promises with a considerable effort on modifying the programmes to suit different generations. In terms of effectiveness of the EVP - 40% of participants globally see their EVP as clearly aligned with their market. Yet, only 20% agreed that their EVPs are clearly differentiated. In India, these numbers are 54% and 33% respectively. Also, 41% participants in India see their organisation communicating the EVP well and 43% participants have seen their organisation deliver on their EVP over the last three years. The survey also finds that Indian companies are increasingly adopting workforce segmentation. Eighty five per cent companies in India have adopted formal ways of identifying top talent as compared to 72% globally. Companies are also increasingly segmenting their high potential employees and identifying employees with critical skills as a part of their talent management programmes. As employers endeavour to deliver profitable growth in a period of economic volatility, their focus needs to be on crafting and communicating an EVP that helps to attract and retain employees with critical skills and engage all workers by striking a reasonable balance between employee and employer needs. Achieving these objective requires focusing scarce programme resources on the key drivers of sustainable engagement and sharpening and differentiating the organisation’s EVP across employee segments. Figure 4. Percentage of organisations agreeing with the following statements Global AP Fast Growing AP Developed AP Overall India 7
    • 8 towerswatson.com Our organisation does a good job communicating the EVP to employees Our organisation’s EVP is clearly aligned with what we stand for in the marketplace Our organisation has done a good job delivering on the EVP over the past three years The EVP at our organisation is clearly different from other organisations with whom we compete for talent Our organisation has designed customised EVPs for critical employee segments The EVP at our organisation varies in different geographies or business units 28% 39% 31% 22% 19% 23% 32% 18% 37% 41% 40% 29% 44% 54% 28% 25% 22% 28% 19% 15% 12% 20% 32% 29% 26% 31% 43% 41% 33% 34% Global AP Overall AP Developed AP Fast- Growing India Rewards Employers in India believe that their employees understand how their base pay is determined and feel that managers need to execute the base pay programme better. They also see the base pay programme as supporting the desired culture and their attraction and retention goals. Compared to their global and AP counterparts, Merit Pay increases for India are higher but the annual bonus plans are not as differentiating. Employees who did not meet expectations Employees who partially met expectations Employees who met expectations Employees who exceeded expectations Employees who far exceeded expectations Overall merit increase Distribution Merit increase % of salary Actual STI Funding Target STI Funding Distribution Merit increase % of salary Target STI Funding Actual STI Funding Distribution Merit increase % of salary Target STI Funding Actual STI Funding 5 550 0 0 0 0 0 0 0 0 10 1 50 50 9.5 3 55 50 10 5 52.5 50 59 3 100 100 57 8 100 100 55 10 100 100 11020 5 115 110 19 11 115 115 20 14 110 7 7 130 126 9.5 15 135 130 10 18 120 120 100 3 - - 100 9 - - 100 12 - - AP Overall India Figure 5. Percentage of organisations agreeing with the following statements Figure 6. Performance-based rewards: Differentiation by individual Global AP Overall AP Developed AP Fast- Growing India Global
    • Document Title 9 Employees at my organisation are making greater use of social business/collaboration tools Employees at my organisation who use social business/ collaboration tools are more productive Employees at my organisation are using social business/ collaboration tools to work together more effectively Global AP Overall AP Developed AP Fast- growing India 44% 36% 24% 44% 30% 42% 32% 27% 30% 49% 32% 47% 48% 26% 37% Use of Social Media: Prevalence and impact Fast growing countries in the AP region are using social business/collaboration tools more than companies in other regions. Forty-eight per cent participants in India reported increased use of social media. Figure 7. Percentage of organisations agreeing with the following statements
    • 10 towerswatson.com Conclusion Rough economic terrain and global employment competition will present all types of challenges for employers in the years ahead and cost pressures are likely to be intense for some time to come. But savvy players will tackle the hard work of getting their EVP and total rewards strategy right — because the rewards are demonstrable, significant and sustainable. In the high-stakes quest to find, keep and highly engage the right workforce, the EVP can be an effective tool in creating the right balance between employee preferences and employer needs — leading to stronger overall performance and improved financial outcomes. Organisations willing to drive the design, delivery and differentiation of their EVP forward can create a successful future for both the organisation and its employees.
    • Towers Watson 21 Tothill Street Westminster London SW1H 9LL Cert no. SGS-COC-O620 Towers Watson is represented in the UK by Towers Watson Limited, Towers Watson UK Limited and Towers Watson Capital Markets Limited. Towers Watson Limited, Towers Watson UK Limited and Towers Watson Capital Markets Limited are authorised and regulated by the Financial Services Authority. Towers Watson Limited is authorised and regulated by the Financial Services Authority. The information in this publication is of general interest and guidance. Action should not be taken on the basis of any article without seeking specific advice. To unsubscribe, email eu.unsubscribe@towerswatson.com with the publication name as the subject and include your name, title and company address. Copyright © 2010 Towers Watson. All rights reserved. TW-EU-2010-00000. Month 2010. towerswatson.com Towers Watson’s 2012 Talent Management and Rewards Survey was fielded between the end of April and the first week of June 2012. In total, 1,605 respondents from across the globe participated. There were a total of 89 participants from India across sectors and industries. The research documents companies’ efforts to tackle the hard work of fine-tuning their employee value proposition (EVP) and total rewards strategy for global competition — and the demonstrable, significant and sustainable rewards of doing so. Asia Pacific (AP) Fast Growing countries include - China, India, Indonesia, Malaysia, Philippines, Thailand and Vietnam. Asia Pacific (AP) Developed countries include - Australia, Hong Kong, Japan, Korea, Singapore and Taiwan About the Study
    • Towers Watson 21 Tothill Street Westminster London SW1H 9LL Cert no. SGS-COC-O620 Towers Watson is represented in the UK by Towers Watson Limited, Towers Watson UK Limited and Towers Watson Capital Markets Limited. Towers Watson Limited, Towers Watson UK Limited and Towers Watson Capital Markets Limited are authorised and regulated by the Financial Services Authority. Towers Watson Limited is authorised and regulated by the Financial Services Authority. The information in this publication is of general interest and guidance. Action should not be taken on the basis of any article without seeking specific advice. To unsubscribe, email eu.unsubscribe@towerswatson.com with the publication name as the subject and include your name, title and company address. Copyright © 2010 Towers Watson. All rights reserved. TW-EU-2010-00000. Month 2010. towerswatson.com