Organizations would rather invest in employees well-being than give them actual cash, and well-being spending is up by more than 7 percent this year. (Photo: Shutterstock)
Jobs just aren't as rewarding as employers may think they are.
According to Deloitte's 2019 Global Human Capital Trends report, not only are organizations transforming themselves to better meet the challenges of a changing world but they're having to work harder at attracting and retaining workers.
And they're not doing a very good job of it when it comes to the rewards of work—from pay to the intangibles. Simply put, the report's authors write, “Rewards programs are falling behind both internal and external expectations.” While workers are looking for money, that's not all they want—and organizations “have been guessing and don't know what their people want or value” in terms of other rewards.
Rewards have not been adequately adjusted to drive desired outcomes, and the gaps are causing frustration among workers.
Record profits for corporations, an unemployment rate at its lowest level in nearly 50 years and wages that haven't even kept up with inflation—that's the flaw in the picture. In fact, the report says that just a third of respondents even felt their organizations were ready or very ready to address the rewards issue, and only 11 percent of respondents believed their rewards strategy was highly aligned with their organization's goals.
Organizations are readier to part with money to provide employees with “well-being” rather than actual cash, with well-being spending up by more than 7 percent this year. Then there are flexible work hours, free lunches, unlimited vacation and loads of other perks that don't put money in workers' pockets.
But workers want more—and it's not just money that they want, either. What they want is the work to be valuable to them—and to have the chance to “learn, grow and progress.” Even among members of the alternative workforce, the attitude toward what constitutes work and what constitutes reward has changed—and employers aren't keeping up.
Pointing out that most employers haven't even really examined the issue, the report says, “Respondents to this year's survey ranked compensation, flexibility, learning and development, and health and well-being benefits as the most important rewards in engaging the alternative workforce. It is critical for organizations to decide how to apply rewards practices not only to full- and part-time workers but also to gig workers, contractors and crowdsourced talent who fall outside the traditional bounds of the employer-worker relationship.”
Not only are benchmarking and best practices not the answer, the report adds—saying “best fit” is more important—it also says that employers need to cultivate relationships with their workers rather than throwing rewards at them—a very different mindset from what's been common practice in the past. In addition, rewards need to be designed to the workforce's needs. And that can present a challenge, with respondents choosing 'Not understanding what's most important to employees” as the top issue to effective rewards reform.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
