Leones, Jeric

BSBA-2F

BAC2 FINAL ASSIGNMENT 1

NEWS ARTICLE ON COMPENSATION AND BENEFITS OF EMPLOYEES

_____________________________________________________________________________________
_______

Emerging trends in
compensation and benefits in 2023
Shivangi Sharma , ETHRSEA

Compelling compensation and benefits packages are essential for attracting and retaining top
talent. Employers must regularly review and update these offerings to remain competitive in the job
market and meet the evolving needs of their workforce. In this article, let's explore some of the key
compensation and benefits trends to make rewards and compensation strategies pivotal for
organisations.

It has never been more complicated for employers to decide how much to pay their
employees as they deal with stagflation, pandemic recovery, remote working, and the talent shortage.
The amount and quality of the employee compensation information employers use are crucial now
more than ever.

Benefits (including total rewards), according to a Gallup report, are important factors for
employees to consider when choosing a job, with 28% of respondents considering them as the main
factor and 40% rating them in their top three.

Organisations must recruit top talent, encourage and reward performance, and establish
alignment with business imperatives and other talent initiatives if they want to stay competitive.

The Kornferry Report "Pay in 2023" states that 27% of firms want to provide some additional
remuneration or perks to counteract inflation, with cost-of-living adjustments, food and
transportation subsidies, or monthly cash allowances being the most popular options. However, most
businesses continue to take a cautious, "wait and see" stance in light of prospective recessions and
job losses.
 Even while the budgets for raises are a little more generous than in prior years, the gap
between wage and price increases is still at an all-time high.

Let's explore some of the key compensation and benefits trends to make rewards and
compensation strategies pivotal for organisations.

#1 Pay transparency
Even if your compensation system is fair, it won't matter if employees are unaware of it. As
per a PayScale research, only 22% of workers believe they are being paid appropriately, compared to
42% of employers who think they pay their employees fairly. Less than 30% of employees and
employers believed that their organisation's pay-setting procedure was open and transparent.

The report further demonstrates that pay transparency is a significant issue in firms, with over
half of them simply providing employees with information on "when and what to expect on
paychecks."

Simply put, mis is unacceptable if a company wants to recruit and keep top people.
Companies should strive to develop a compensation policy that is based on corporate culture and
talent strategy, and then openly convey it to all employees.

#2 One size does not fit all

There is a discrepancy between company and employee goals and needs for benefits,
according to Alight's report workplace benefits in a changing world. Only 37% of employees feel that
58% of organisations understand the demands of their staff.

The study emphasises the significance of tailored and effectively articulated employee benefit
plans by demonstrating a considerable gap in benefits' perceived value.

Companies should identify unmet requirements rather than take a one- size-fits-all approach
to benefits in order to provide a great employee experience. This entails taking lessons from the past
and identifying the major advantages that workers may require or request in the future. Your
employees will have greater discretion over the costs they want you to cover owing to personalised
benefits. By doing this, you'll be able to pay them back for the benefits they value the most.

#3 The bonus employees really want

The 'new pay' mindset has contributed to the need to include bonus and incentive
schemes in reward packages.

These compensations-salary, bonuses, commissions, and allowances-all play a crucial

role in enhancing an employee's financial security.
 Given the importance of financial perks in an employee's total remuneration, factors
like incentives may increase the employee's cost-to- company (CTC), whereas meal vouchers
are a prized perk.

Employers are beginning to understand that offering variable compensation to

employees may both inspire and motivate them to perform their best job and give them
more flexibility in how they are compensated. In fact, according to a survey by SHRM,
variable compensation can prevent high performers from leaving the company for a rival who
is providing a 10% increase in base salary.

Bonuses serve as a powerful motivator for employees. When employees know that
their hard work and achievements are directly linked to financial rewards, they are often
more motivated to perform at their best and meet or exceed performance targets.

#4 Data-driven and transparent compensation

The use of data-driven and transparent compensation, which entails using
data and analytics to inform and explain compensation choices and practices, is
a major trend in compensation management. You may compare your pay and
benefits against the market, find pay gaps and discrepancies, and maximise your
budget for compensation and return on investment with the use of data-driven
compensation.

Building trust and fairness among employees, communicating your

compensation philosophy and practices, and abiding by legal and ethical
requirements can all be accomplished with the aid of transparent
compensation.

Way forward

While employee bonuses offer numerous benefits, employers need to

design programs that are fair, transparent, and well-communicated to ensure
they have the desired impact on employee motivation and engagement.
Compelling compensation and benefits packages are essential for attracting and
retaining top talent. Employers must regularly review and update these
offerings to remain competitive in the job market and meet the evolving needs
of their workforce.

___________________________________________________________________
_____

Published On Sep 18, 2023 at 08:18 AM IST

Read more at:

https://hrsea.economictimes.indiatimes.com/news/industry/top-emerging-
compensation-and-benefits-trends-in-the-evolving-workplace/103729792