Does your rewards strategy reflect the massive changes we’re seeing in the workplace?
The World Economic Forum (WEF) has released a foreboding figure – 35% of the skills we use for jobs right now will totally change by 2030. They’re also saying that 65% of children born today will have careers that literally don’t yet exist.
Mike Fenlon, PwC chief people officer, likens all the changes to a quote from the cyberpunk writer, William Gibson, “The future is already here. It’s just not evenly distributed,” he says. “What we’re seeing today will be dramatically, dramatically accelerated [in a decade].”
The automatic response is to feverishly inject lots of new tech into the mix. And that’s important. But to successfully navigate this brave new world of work, businesses need to become more focused on the people that make up their organisation. You see, things are changing, but human nature is a constant. In business, that relates to how we hone and celebrate innately human skills (EQ, communication, leadership, creativity).
Rewards are already a vehicle that plugs us into the human side of business. Done right, they allow us to recognise and boost positive human behaviour. So, perhaps the question is not how to rethink your rewards drive. But more about making sure we create employee experiences that represent the modern workforce.
So, what exactly is changing?
The biggest, fundamental shift seems to be around the culture of work. Automation, AI and other technological advancements have already had a massive impact. But as we move closer to a new age of work, the focus is on emotional intelligence (EQ) skills. On the way we work together as diverse teams. The way we communicate. The need to upskill. And the need for trust within a space where personal data is readily available and easily used to influence behaviours.
But that’s not all the change the working world is seeing:
- Cubicles are gone (cue angelic chorus for celebration).
- There’s greater flexibility around how, when, and where we work.
- The workforce has become a lot younger with Millennials (or Generation Y) estimated to account for 50% of the global workforce by 2020 and Generation Z having just entered the market.
- For the first time in history, CEOs are managing 5 generations of employees simultaneously: Traditionalists, Baby Boomers, Generation X, Millennials and Generation Z.
What does that mean for your business?
Aside from making the most of all the new tools, gadgets, and progressive behaviour mapping philosophies coming out of this modern business evolution. You’ll want to make sure you focus on these two things:
- Your company’s personality or culture (behavioural expectations, practises, interactions, perceptions) needs to be strong.
- Hiring the right employees should be a top priority. And you’ll want to keep them happy because unhappy employees are a) less productive and b) more likely to leave, both of which have financial implications for your business.
And your reward strategy?
Thankfully, the very nature of a reward strategy aligns perfectly with all of the changes we’re seeing. That’s because incentives, done right, are:
- Vehicles for positive emotional experiences.
- Allow for communication around company values.
- Create opportunities to celebrate good work.
- A powerful engagement tool.
- Provide a framework for talent development and retention.
- Celebrate work/life balance.
- Establish a space for work benefits that inspire.
The right rewards...
Given the global economic situation and ongoing rising prices, money might seem like an obvious choice. But cash isn’t king when it comes to employee rewards. Especially given that current recognition (and business) trends focus on developing company culture, and enhancing employee experiences.According to Scott Jeffrey’s study, “The Benefits of Tangible Non-Monetary Incentives” there are six reasons that non-cash rewards are the way to go:
Giving a reward is about so much more than the reward itself. It starts with the perceived value someone places on what you are giving. The reaction you get from an employee (loyalty, productivity, positive perception of your company) adds value to the reward too. And the reaction from a cash reward is very shallow. Whereas non-cash rewards are able to speak to both intrinsic and extrinsic needs and so, illicit far more profound and powerful reactions.
How does an employee separate a cash reward from a bonus? The answer is that they very often won’t. Also when you start giving out cash incentives, a culture of entitlement starts to develop.
This has to do with people’s relationship with money. Most people experience a certain level of guilt when they buy something. So they’re probably going to use the cash reward in a sensible way or feel very guilty about splurging on a gift for themselves. If you give them a non-cash reward, they don’t have to make a purchase and so the positive experience of receiving your incentive remains intact.
4. Social reinforcement
People don’t like to talk about money. But they don’t mind ‘bragging’ about a restaurant voucher incentive or a spa gift card. That’s why non-cash rewards become a tangible symbol of achievement.
Experiences last longer than cash. It’s that simple. A non-cash reward is like a gift that keeps giving in terms of the emotional connection you form with your staff.
It’s hard to promote a cash incentive because it lacks imagination. Think of your internal office communications. Talking about a R250 reward has no legs. Letting people know you’re giving away a dinner for 2 is a wonderful narrative to explore.
The ultimate reward for the new world of work
By 2020, Millennials will account for 50% of the global workforce. And Generation Z is hot on their heels. What that means is that at least half of your team is exceptionally digitally savvy, place a high premium on work/life balance and are prone to job-hopping.
The ultimate rewards are, therefore:
- Digital in nature
- Not cash
- To quote Scott Jeffrey again; promotable, memorable, and justifiable.
There’s one incentive that ticks all those boxes – an online shopping card that gives your employees access to an extensive mix of popular online retailers. It’s also an instant gift. Something you can personalise, gather data from, and it appeals to all 5 generations currently in the workforce.
But remember, an online shopping card is only one piece of the puzzle. The success of which lies in the complete package – a holistic rewards program.
Ready to rethink your rewards and use them to leverage all the changes we’re seeing in the workplace? Give us a call and let’s get this process started.