We have already reported on how Compensation & Benefits has moved beyond being purely an administrative process and is now used strategically to help with the attraction, retention and engagement of employees. This creates a much closer link between Rewards and other Talent Management processes.
We have seen in previous reports how technology has helped create an integrated Talent Management system, linking processes around Leadership Development, Performance Management and Career & Succession Management into a seamless end-to-end user experience. So it is no surprise to find organisations now increasingly using these systems for Compensation & Benefits processes too.
A tighter integration between Talent Management processes and Compensation & Benefits allows for variable compensation to be linked to individual and team achievements, as well as alternative or specific offerings to high performers and high potential employees. We have already seen that 91% of participants align performance management with salary review, and 84% do the same for individual development. There is a growing indication that integrated systems will lead to other Talent Management processes becoming linked with salary and reward reviews.
Within 78% of participants both the merit increase and variable compensation elements are supported by technology, with secondary benefits being supported within only 59% and training investment 49%. Clearly there is room for greater integration between technology and the wider range of offerings that now contribute towards Total Rewards.
In one best practice example, a global manufacturing business clearly laid out the connection between talent and compensation with goals, KPIs, values and performance all linking in to salary and bonus planning. Another Top Employer from the healthcare sector has compensation data, incorporating planning, review and history, as part of the managers’ integrated Talent Management system.
One area in which technology is increasingly influential is the global harmonisation of compensation strategies and frameworks, across regions and borders. This is often done through the adoption of globally aligned job and career frameworks that are regularly benchmarked and evaluated. This helps facilitate smoother international secondments and transfers.
Globalisation and technology have also had a major impact on the talent market. International companies, with their scale and reach, are able to attract talent globally through offering a range of benefits, both financial and for career and personal development, including secondment opportunities. But similarly, national, single country organisations have been able to take advantage of increased mobility and hire people cross borders and cultures creating a much richer workforce mix. The emergence of highly sophisticated global information systems powered by technology has helped to support and internationalise HR processes, gradually eroding local and
regional variations.
Four key trends
‘Technology that enables integration with talent management’ is one of the four key trends we have identified in the Compensation & Benefits report. These four trends are shaping the way Compensation & Benefits can be used strategically to deal with talent attraction and retention issues.
Each one recognises the variety of ways in which employees now find job satisfaction, be it how performance is rewarded or acknowledging the need for healthier work patterns.
Download the full Compensation & Benefits report to learn all about the current trends in Compensation & Benefits and how organisations deal with these trends in their business processes.
