Why compensation is vital in the Great Employee Reset
As the way we work continue to change and evolve, employees are rethinking their priorities and the type of job and career they want in the future.
Organisations who are not paying enough attention to employee wellbeing and who are not offering the flexibility for employees to choose where and how they work, are likely to face an unwelcome talent drain.
Yury Karp, Global Account Director, BIPO, shared, “Many businesses and HR professionals do not know how to deal with the challenges and the long-term effects such a mass exodus of employees will have on business operations.”
He added that as businesses grapple with the situation, momentum is gaining to re-evaluate outdated people and compensation practices. Understanding employees’ aspirations, performance, and engagement are vital in future-proofing talent development and retention strategies.
Based in Shanghai, Karp highlighted a new “lying flat” movement that originated from Shenzhen, and which sees Gen Z and Millennials believing in doing the bare minimum at work to get by, as opposed to working to the bone like their parents did.
For organisations, this Great Employee Reset phenomenon is offering the opportunity to re-evaluate and reset business priorities, including improving employee wellbeing.
While this should encourage employers to find more innovative ways to engage with employees and improve the flexible work experience, there remains an immutable fact that will not change – employees still expect to be renumerated fairly for the work they do.
According to Mercer’s COVID-19 pulse survey, dissatisfaction with pay and compensation benefits rank among the main drivers for employees to leave their jobs in Asia.
Declaring this as a “reality check”, Shirman Li, Client Solutions Director, BIPO, said, “Businesses need to respond quickly and address the changing needs of employees and there is now an urgent need for employers to evaluate the compensation package and how to proactively manage the process.”
“There is now an urgent need for employers to evaluate the compensation package and how to proactively manage the process.” – Shirman Li, Client Solutions Director, BIPO
Creating an integrated compensations and benefits strategy
When re-evaluating their compensation and benefits strategy, open communication and clarity should feature prominently in the thinking of HR and line managers, Li suggested.
“Before jumping into the busiest year-end compensation review process every year, it is important for companies to set their rewards strategy right at the beginning and convey this to employees in a transparent and timely manner,” he added.
To improve this process, businesses are increasingly looking for a unified SaaS-based solution that provides the capabilities to run periodic reviews, benchmark performance rations and automated approvals, while integrating with payroll and finance functions.
One example is BIPO’s compensation management module, which allows HR and line managers to forecast the cost of human resources, manage compensation planning, compensation cycles and approval workflows with centralised oversight, and generate flexible compensation reporting.
The module also serves as a platform for organisations to improve the employee experience by communicating more meaningfully with employees.
Citing the year-end compensation review, Li described, “This is the key moment to show employees how line managers acknowledge their contribution to the company or team and how they plan to compensation them accordingly.”
“As a HR or line manager, apart from the actual number of the approved budget, communication is a critical factor too. Sometimes, it’s not exactly about how much of an increment the employee receives – it’s about the message that is delivered to them. The importance of communications is sometimes forgotten, which could lead to some unexpected and unsatisfactory results that could be avoided.”
Leveraging on BIPO’s compensation management module, manual processes can be minimised and more time devoted to improve communications between line managers and employees.
And while there might not be a one-size-fits-all approach for everyone, organisations who are successful in retaining their best talent are likely to be those who combine enhanced compensation and incentives with other non-monetary benefits.
“There is a genuine need for businesses to address the burnout felt by employees and disconnection from their teams.” – Yury Karp, Global Account Director, BIPO
Karp echoed, “There is a genuine need for businesses to address the burnout felt by employees and disconnection from their teams.” However, he added that maintaining a delicate balance while taking a progressive approach towards employee wellbeing, compensation, and talent retention is critical in today’s dynamic business landscape.
Agreeing with this assessment, Li said, “Benefits like wellbeing and work-life balance are becoming more and more important. Ultimately, it is about companies sending the message that they care about their employees not just from a work perspective, but also prioritise their physical and mental wellbeing. In the long run, that is the only sustainable way to retain employees.”
As organisations continue to be innovative in designing their compensation and benefits strategy, he reiterated the importance of leveraging tools to manage administrative processes, so that HR and line managers can spend more time communicating with employees.
“Especially for monetary benefits, these would need to be linked with payroll processes, shown on the compensation statement or pay slip, and be made easily accessible to employees. BIPO’s compensation management module allows you to do all that, and more,” Li concluded.
Click here to find out how BIPO’s award-winning global payroll and people solutions, including its compensation management module, can help you create a successful compensation and benefits strategy.