January 7, 2020 | by: Dasslin Corral
Most companies employ standard benefit packages that is nearly the same for every employee.
Organizations typically offer cost-effective yet valuable benefits to every employee such as vacation and sick leaves, health insurance, and retirement planning. However with four generations now in the workforce, the youthful and instantaneous labor pool is changing expectations on employee compensation packages — demanding for a more personalized approach.
In fact, an article from Forbes affirms that HR leaders are starting to look at better and more personalized compensation programs that reflects the company’s strategy. Through customized compensations, companies are able to boost employee engagement and reduce employee turnover.
Customization in this sense means employees decide how much of their total compensation is represented in salary, benefits, pension, vacation, etc. Talents now demand for a custom reward experience that reflects the way they live, work, and communicate.
Why personalize rewards?
Business and HR leaders should begin to plan and impose personalized benefits for their employees to meet the varying needs and desires of today’s diverse workforce.
Offering a personalized rewards and compensation package in the era of gig economy encourage talent engagement and retention.
A more personalized employee rewards system provides employers the perfect opportunity to learn more about their workforce and determine if different positions or roles at distinct levels within the organization value different rewards.
The knowledge gained from such personalization effort allows HR leaders to produce a greater variety of more meaningful rewards that will help attract and retain a more diverse workforce, while encouraging desired outputs.
This trend is expected to smartly be utilized in countries with a booming HR industry. For instance in Indonesia, personalized salaries is among the top HR trends organizations consider in solving the country’s current talent shortage problems.
More Indonesian business leaders are currently looking to adopt a personalized salary policy in their compensation package to encourage skilled talents.
Besides retention, reward options help employees develop personal skills. Having separate rewards for different strategic goals motivates employees.
Personalized compensation gives talents the opportunity to establish specific, relevant skills such as time-management, deeper product knowledge, and increased productivity for achieving desired business goal.
Organizations should keep in mind that meaningful benefits are about supporting the complete employee. Their time and effort to improve would be met with tangible rewards, and as a result, the whole company’s operation will also improve.
How do you start?
HR professionals are communicating personalized pay and rewards through a one-to-one discussion with employees. Some are also doing this through social listening, focus groups, and surveys.
With information from these initiatives, HR leaders are able to tailor rewards packages — offering different mixes of compensation that fits the employee’s needs.
Hence, businesses should start recognizing the need for a more personalized and agile approach to expand the definition of rewards and look beyond traditional approaches.Discover more of these new tools and approaches to boosting employee rewards’ at the upcoming HR Leaders Asia happening in Jakarta, Indonesia on the 16th of April 2020.