A tumultuous world economy and evolving business challenges continue to create a volatile environment for companies across industries, whether they are attracting and retaining hot and high-demand skills or exploring ways to contain costs or battling high inflation.
These challenges are forcing organizations worldwide to re-evaluate their rewards priorities. This makes high-quality salary data and market insights critical for making decisions that are defensible to senior management, employees and other key stakeholders.
Leaders in WTW’s Rewards Data Intelligence business have been speaking to clients about real-time issues that are affecting both day-to-day and long-term decisions. Here, they share their insights on the latest work and rewards questions they’re being asked, and how the creative use of salary market data can address modern-day challenges.
Hatti Johansson: Employers need to react and adapt swiftly when evaluating their rewards programs to attract the right talent, retain the right employees and maintain strong business operations. In a volatile environment, understanding emerging market practices is critical for making timely workforce decisions. And to achieve these goals, HR and compensation professionals must rely on robust market intelligence.
Our clients also have told us that, when it comes to their attraction and retention efforts, they want to know what their competitors are planning, like:
To address these questions specifically, we expanded our annual Salary Budget Planning Survey, a leading market data source for actual and projected salary increases, to include questions on the impact of inflation on pay as well as attraction and retention challenges.
When used alongside our global compensation surveys, benefits policies and HR practices reports, organizations can review emerging market practices, gain a more holistic view of their strategic priorities, and understand how their actions align with those of their peers. And by leveraging our interactive, advanced compensation software, HR professionals can make their own market pay-data comparisons.
Hatti Johansson: Not always. Sometimes organizations have more unique or tailored questions. They may need customized analytics around competitive market pay positioning by peer group, industry or organization size.
In those cases, we work with our clients to creatively use available market data sources or conduct custom studies. Market benchmarking, year-over-year pay reviews, in-depth reviews of critical roles, and considerations around job design and workforce segmentation are just a few examples.
Sambhav (Sam) Rakyan: The past few years have highlighted the need for organizations to be thoughtful when it comes to how they attract and retain employees, and that’s largely due to the challenges they face in the uncertain economic environment – not to mention responding to increased employee expectations for equitable, transparent pay and flexible work arrangements.
We are seeing organizations shift their total rewards value proposition to a more purpose-driven strategy that focuses on employee attraction and retention. Employers are reviewing pay packages, existing health plans and employee benefits, work arrangements, and diversity, equity and inclusion programs to remain competitive and avoid losing critical talent.
Our clients also are revisiting their operations, structure, size, leveling and jobs to prepare for the future. A key component includes looking at organization and industry comparisons to support business growth.
Jasbir Singh: In our latest Salary Budget Planning Survey that Hatti referenced, nearly 70% of organizations told us that they are struggling to attract and retain critical talent this year alone. That is a staggering increase from 29% just two years ago.
To successfully address these issues, it is essential for organizations to balance their employees’ wide-ranging needs to maintain engagement and motivation. This means adhering to a strong compensation strategy that is purposefully aligned with organizational goals, culture and values – not simply reacting to an increased cost of living or employee demands. Employers are adopting creative monetary and non-monetary actions to address attraction and retention and meet employee expectations in the most cost-effective manner.
Many organizations are looking at how they deliver their compensation programs and health and wellness benefits. They also are increasing workplace flexibility and placing a broader emphasis on diversity, equity and inclusion programs, as Sam noted.
Sam Rakyan: Looking at market data and connecting that with the discussions we’re having with clients, digital, business continuity and resilience emerge as top skills. The digital environment – which has accelerated incredibly since 2020 – has allowed many organizations to be innovative. Yet, there is a struggle to compensate digital talent when leaning on traditional functions and disciplines.
Many of our clients are customizing rewards for their digital workforce and need reliable data to source talent based on exact skills requirements. WTW’s SkillsVue is helping organizations understand the impact of skills on pay for digital talent and learn which skills are most prevalent.
Jasbir Singh: As organizations prepare for their annual compensation planning, they may not use market data in the usual way. Employers must be creative when defining and using market data. This could mean benchmarking overall compensation spend against relevant peer companies, or it could mean using market data to ensure that critical and hot jobs are paid competitively. Regardless, without the right data in-hand, the outcome will naturally be a loss of critical and high-performing talent, and that is detrimental to every organization’s performance.
