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Total Rewards 'State of the Union': Top Trends, Challenges and Recommendations for the Coming Year
 

Total Rewards 'State of the Union': Top Trends, Challenges and Recommendations for the Coming Year

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This session will draw upon research from IBM's most recent compensation, rewards and engagement surveys to help you understand how organizations are changing reward programs to meet the challenges of ...

This session will draw upon research from IBM's most recent compensation, rewards and engagement surveys to help you understand how organizations are changing reward programs to meet the challenges of 2014. Our speakers will address compensation, benefits, recognition, staffing and overall levels of preparedness among the nearly 1,500 HR teams who participated in our survey. Attendees will learn:

What the top future challenges for rewards professionals are in 2014.
How organizations are changing (or not changing) program funding this year.
How compensation teams can help maximize engagement across an organization.
How organizations can better prepare managers to be better "reward ambassadors."

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    Total Rewards 'State of the Union': Top Trends, Challenges and Recommendations for the Coming Year Total Rewards 'State of the Union': Top Trends, Challenges and Recommendations for the Coming Year Presentation Transcript

    • #WFwebinar         Speakers: Alison French, CCP, GRP Market Segment Leader, Compensation, IBM Deb Nielsen, CCP, GRP Director of Compensation Research, IBM Rena Rasch, Ph.D. Research Manager, IBM Moderator: Ladan Nikravan Senior Editor, Workforce magazine Total  Rewards  'State  of  the  Union':  Top  Trends,   Challenges  and  Recommenda;ons  for  the  Coming  Year  
    • #WFwebinar         Tools  You  Can  Use   Audio  Control   –  A  dial  in  number  will  not  be  provided.   –  Adjust  the  volume  by  sliding  the  indicator   in  the  Media  Player  box  to  the  le<.   –  Also  check  your  computer’s  volume  for   external  speakers  or  headsets.  
    • #WFwebinar         Tools  You  Can  Use   Ques/on  &  Answer   –  Type  in  your  quesBon  in  the  “Q&A”  box   to  the  le<.   –  These  queries  are  visible  by  the  presenter   ONLY.   –  Type  your  quesBon  in  the  space  at  the   boKom.   –  Click  “Send.”  
    • #WFwebinar         TOOLS YOU CAN USE Tweet §  Click on “Post” in the Twitter widget. #WFwebinar @workforcenews
    • #WFwebinar Speaker Bios TOOLS YOU CAN USE Resources Media Player Q&A Slides Twitter Help Post Event Survey Share This
    • #WFwebinar         FREQUENTLY ASKED QUESTIONS 1. May I receive a copy of the slides? YES! Click on the resource list located on the top left portion of your screen. 2. May I review the webinar recording at a later date? YES! You may log in again using today’s link to review the presentation on-demand.
    • #WFwebinar         Ladan Nikravan Senior Editor Workforce magazine Total  Rewards  'State  of  the  Union':  Top  Trends,   Challenges  and  Recommenda;ons  for  the  Coming  Year  
    • #WFwebinar Alison French, CCP, GRP Market Segment Leader, Compensation IBM Total  Rewards  'State  of  the  Union':  Top  Trends,   Challenges  and  Recommenda;ons  for  the  Coming  Year   Deb Nielsen, CCP, GRP Director of Compensation Research IBM Rena Rasch, Ph.D. Research Manager IBM
    • © 2013 IBM Corporation IBM Smarter Workforce Agenda •  Macro forces - The economy and legislative climate •  Trends and Forecasts - What are reward professionals doing this year? •  People Matters - What are employees and managers thinking about? •  What does all this mean for 2014? 9
    • © 2013 IBM Corporation IBM Smarter Workforce Top areas of concern Source: Kenexa Compensation Outlook Survey, 2014 10 CONCERNS THAT MAY IMPACT COMPENSATION AND HIRING 53% 39% 38% 16% 10% 7% 43% 55% 57% 72% 76% 73% 4% 5% 5% 12% 13% 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Scarcity of talent Regulatory changes Broader economic conditions Social networking Unemployment rates Outsourcing/Offshoring More concerned No change Less concerned
    • © 2013 IBM Corporation IBM Smarter Workforce Big news… Source: Kenexa National Salary Budget Survey, 2013 11
    • © 2013 IBM Corporation IBM Smarter Workforce Increase budgets in the U.S. have bottomed out in 2009. Though the rebound is yielding increase, salary budgets are still below the pre-recession levels “For the first time since 1980, the U.S. rate of inflation is higher than the average total salary budget increase” WorldatWork – August 2011 More on increase budgets 2008 2009 2010 2011 2012 2013 2014 Kenexa Compensation 3.0% 3.0% 3.0% 3.0% IPAS 3.9% 1.1% 2.5% 3.2% 3.2% 3.0% 3.0% Buck 2.9% 2.9% 2.7% 2.8% 3.0% 3.0% Conference Board - - 2.5% 2.5% 3.0% 3.0% 3.0% Mercer - - 2.7% 2.9% 2.9% 2.9% 2.9% Towers Watson 3.4% 1.7% 2.8% 2.7% 2.8% 2.8% 2.9% WorldatWork 3.8% 1.9% 2.8% 2.9% 3.0% 3.0% 3.0% 12
    • © 2013 IBM Corporation IBM Smarter Workforce Certain HOT Jobs continue to outpace the market, exceeding the overall market average of 9% in the 5 years between 2007 and 2012 Hot jobs Job Title Change Long Term Care Executive 27.1% Certified Occupational Therapist Asst 25.7% Hardware Engineer III 20.3% Chemical Engineer III 19.4% Staff Nurse - Surgical First Assistant 17.4% Nurse Practitioner 17.2% Certified Nursing Assistant 16.4% Network Administrator 15.1% Software Engineer III 14.7% Source: CompAnalyst benchmark database 13
    • © 2013 IBM Corporation IBM Smarter Workforce Job Title Change Accounts Receivable Manager 2.9% Administrative Services Supervisor 1.5% Communications Representative III 2.1% Facilities Manager 2.3% Financial Analyst II 4.7% Mainframe Programmer II 2.9% PC Maintenance Technician II -6.5% Others jobs aren’t so lucky, significantly lagging the 9% average over the last 5 years Not-so-hot jobs Source: CompAnalyst benchmark database 14
    • © 2013 IBM Corporation IBM Smarter Workforce 15 Job openings and unemployment Pay for Performance: A Clear Signal for Retention and Engagement
    • © 2013 IBM Corporation IBM Smarter Workforce Attrition
    • © 2013 IBM Corporation IBM Smarter Workforce Economic environment concerns §  Are we emerging from the economic down turn? §  What kind of turnover might we face? §  Will we be able to retain top performers? 17
    • © 2013 IBM Corporation IBM Smarter Workforce Department Of Labor budget §  Hundreds of new enforcement staff have been added to the DOL §  2014 DOL budget –  $12.1 Billion versus 2013 $ 12.0 Billion –  Nearly $14 million to combat the misclassification of workers as independent contractors –  An additional $3.4 million for the Wage and Hour Division to support greater enforcement of the Fair Labor Standards Act and the Family and Medical Leave Act –  An increase in 61 FTEs for WHD alone 18
    • © 2013 IBM Corporation IBM Smarter Workforce More regulatory concerns §  Impacts of the Affordable Care Act as the employer mandate looms §  Home health care exemption status change §  OFCCP and EEOC are deploying more compliance resources with a focus on pay equity §  Potential changes to overtime regulations 19 “I hereby direct you to propose revisions to modernize and streamline the existing overtime regulations.” --President Barack Obama to Labor Secretary Perez, March 13, 2014
    • © 2013 IBM Corporation IBM Smarter Workforce Compensation Outlook 2014 20
    • © 2013 IBM Corporation IBM Smarter Workforce Reward program funding PERCENT OF ORGS INCREASING FUNDING VERSUS PREVIOUS YEAR 23% 28% 37% 28% 23% 20% 22% 24% 25% 35% 22% 26% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2011 2012 2013 2014 PERCENTOFORGANIZATIONS Healthcare MeritIncreases Bonus PERCENT OFORGS INCREASING EMPLOYEE SHARE OF HEALTHCARE COST 27% 43% 45% 15% 67% 64% 51% 23% 29% 44% 45% 16% 0% 10% 20% 30% 40% 50% 60% 70% 80% 2011 2012 2013 2014 PERCENTOFORGANIZATIONS Deductibles EmployeeContributions Co-Pays/Co-Insurance Source: Kenexa Compensation Outlook Survey, 2014 21
    • © 2013 IBM Corporation IBM Smarter Workforce Staffing Source: Kenexa Compensation Outlook Survey, 2014 22 NET CHANGE IN STAFFING LEVELS, YEAR-OVER-YEAR 42% 44% 45% 45% 49% 47% 37% 35% 30% 29% 25% 27% 14% 14% 15% 0% 10% 20% 30% 40% 50% 60% 2010 2011 2012 2013 2014 PERCENTINDICATINGCHANGE Increase No Change Decrease
    • © 2013 IBM Corporation IBM Smarter Workforce Reductions Source: Kenexa Compensation Outlook Survey, 2014 23 47% 60% 27% 29% 29% 27% 0% 10% 20% 30% 40% 50% 60% 70% 2009 2010 2011 2012 2013 2014 %ofrespondentsindicatingRIF
    • © 2013 IBM Corporation IBM Smarter Workforce Will they stay or will they come? Source: Kenexa Compensation Outlook Survey, 2014 24 71% 73% 15% 16% 15% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Retaining high performers/critical functions Attracting quality new hires Unprepared Neutral Prepared
    • © 2013 IBM Corporation IBM Smarter Workforce Compensation challenges §  Big data and analytics §  Generational issues/baby boomer retirement §  Automation/Technology §  Decentralization/remote workforce §  Regulation §  Skills scarcity §  Economy/volatile markets §  The influence of HR in implementing change §  Pay for performance §  Modest merit and HR budgets 25 Prepared Neutral Unprepared Succession planning 45% 24% 30% Baby boomer retirement 35% 38% 27% Increasingly remote workforce 34% 39% 27% Engaging the next generation of workers 45% 29% 26% Automating Comp & HR processes 52% 24% 23% Leadership development 56% 23% 22% Social networking 45% 34% 21% HR analytics 52% 27% 21% Aligning pay with performance 61% 20% 19% Big data 37% 44% 19% Globalization 32% 51% 17% General employee engagement 64% 22% 14% Economic uncertainty 48% 41% 12% Containing healthcare costs 70% 23% 7%
    • © 2013 IBM Corporation IBM Smarter Workforce Compensation & communication Source: Kenexa Compensation Outlook Survey, 2013 26
    • © 2013 IBM Corporation IBM Smarter Workforce Managers Source: Kenexa Compensation Outlook Survey, 2013 27
    • © 2013 IBM Corporation IBM Smarter Workforce Executive compensation §  European decisions relative to Say on Pay and new focus on how much is too much §  Say on Pay’s influence on the board of directors §  Stronger executive pay disclosure §  Better linkage of pay to performance §  Shift from use of time to performance-based equity §  Additional definitions of what annual pay means §  Debates over peer group use §  Passage of requirement to disclose ratio of CEO pay to average employee 28
    • © 2013 IBM Corporation IBM Smarter Workforce How Managers and Employees Feel 29
    • © 2013 IBM Corporation IBM Smarter Workforce Pay fairness over time Notes: WorkTrendsTM U.S. only. * Data were not collected in 2006, so mean across all years was used. 30
    • © 2013 IBM Corporation IBM Smarter Workforce Perception matters Notes: WorkTrendsTM 2013 U.S. only. 31
    • © 2013 IBM Corporation IBM Smarter Workforce Drivers of fair pay Notes: WorkTrendsTM 2013 U.S. only. 32
    • © 2013 IBM Corporation IBM Smarter Workforce Building belief in pay fairness Notes: WorkTrendsTM 2013 U.S. only. Values are relative weights. 33
    • © 2013 IBM Corporation IBM Smarter Workforce Current perceptions Notes: WorkTrendsTM 2013 U.S. only. 34
    • © 2013 IBM Corporation IBM Smarter Workforce Communication breakdown Notes: WorkTrendsTM 2013 U.S. only. 35
    • © 2013 IBM Corporation IBM Smarter Workforce How well are raises and bonuses handled? Notes: WorkTrendsTM 2013 U.S. only. 36
    • © 2013 IBM Corporation IBM Smarter Workforce How well raises and bonuses are handled impacts perceptions of pay fairness. Notes: WorkTrendsTM 2013 U.S. only. 37
    • #WFwebinar         •  Also please fill out the event survey. •  Please take this time to submit your Questions.
    • #WFwebinar         Join our next Webinar! Making  Performance  Management  Work:   Uncommon  Commonsense  Insights   Wednesday, April 16, 2014 2pm ET / 11am PT Register for all upcoming Workforce Webinars at www.workforce.com/webinars