Only 31% of Hong Kong businesses thinks that they have a good understanding of Total Rewards offerings that employees value, according to a survey by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company.
The latest findings of the Moderinsing Total Rewards Survey also found that leading organisations are two times more likely to have a Total Rewards philosophy that customises Total Rewards for different workforce segments. Yet, only 35% of Hong Kong businesses have formal Total Rewards philosophy for different segments of their workforce.
“Organisations are facing increasing pressure to invest strategically in the right Total Rewards programmes that optimise cost and risk. Yet, in today’s workforce, people have new expectations of work and expect to be treated more like consumers” said Wen Wan, Director of Talent & Rewards, at Willis Towers Watson. “Any initiative aimed at improving the Total Rewards experience must take into consideration what employees value most and how those preferences differ by employee segment. Our research and experience show that high cost rewards are not necessarily highly valued by employees and organisations end up spending on high-cost rewards that provide little return in employees’ engagement and retention.”
Total Rewards programmes typically include tools employers use to attract, retain and engage employees including compensation, health and wellbeing programmes, retirement and financial benefits, flexible work programmes, recognition programmes, learning and development opportunities, and career opportunities.
Employees today expect rewards to be designed to reflect their preferences and delivered via a personalised, consumer-grade experience similar to what they have come to expect in their personal lives. Employees seek more choices, flexibility and personalisation in how they are rewarded and in their ways of working.
Employers recognise their shortcoming in these key areas. The survey found that only 35% of Hong Kong employers say they provide meaningful choice within their benefit programmes, a key element of a consumer-centric approach, and a merely 32% say they deliver benefit programmes in a way that provides a consumer-grade experience, compared to global average of 42% and 39% respectively.
“The design and delivery of Total Rewards programmes must keep up with changing employees’ expectations. This shortcoming makes it harder for these businesses to offer a distinct talent value proposition and talent experience in order to attract, retain and engage top talents,” added Wen Wan.
When asked about metrics and measuring the success of talent and rewards programmes, the top ROI measurements for Hong Kong employers are related to both cost and people: total cost of Total Rewards programmes (68%), and the impact on ability to retain employee (48%).
“However, few organisations take a comprehensive measurement approach. A comprehensive approach needs to include: total cost, cost of individual programmes, and impact on attraction, retention and engagement of employees.”
“Given the ongoing changes taking place in today’s work environment, employers are under mounting pressure to rethink their approach to Total Rewards and move beyond the status quo. In order to deliver a consumer-grade experience, organisations also need to consider employee wellbeing, leverage on technology, and prioritise pay fairness, purpose-drive benefits and align to their Inclusion & Diversity strategy in addition to understanding employee preferences and measuring ROI.” said Wen Wan.