From payroll generation, compensation & benefits to now total rewards- What are your views on the evolution of this vertical?
The reasons for existence of Human Resources in any organization are to attract, motivate, retain and engage employees. Compensation & Benefit vertical started as a payroll and benefits administration function, ensuring employees receive accurate salaries on time. With globalization, development of new age industries and ever growing war of talent this vertical evolved beyond the base salary and bonus, transitioning towards the Total Rewards. The hygiene factor of accurate & timely salary administration still remains, however the growing expectation of delivering on value proposition, led to the development of a Total Rewards Strategy in organizations. Business leaders now have greater expectations from HR functions & are looking at more strategic partnership, hence HR practitioners have to think beyond the basics and statutory requirements.
The war of talent has intensified and Total Rewards comprising of compensation, benefits, recognition, work life balance & development has to provide the differentiated edge to an employer.
The stakeholder management with a CFO, CEO and HR Business Partners (HRBP) is a tricky one for compensation & benefits professional. What would be your suggestions to the young Compensation & Benefits (C&B) professionals for managing these stakeholders?
Total Rewards needs to be aligned with HR strategy, which has to be aligned with the organization’s mission, vision and culture. Easier said than done! In reality getting this alignment is most difficult to achieve. The C&B professionals have a strong urge to work in silos with polices as their armour and position/experience as their weapons. In most cases, C&B professionals will stick to their knowledge and define things which they think is right, which is not wrong but at the end of the day it should make a business sense too. Imagine a situation where business is trying to protect the bottom line and HR wants to run a Health & Wellness program!!
The C&B professional need to speak the language of business like P/L, EPS, Cash Flows, productivity, operating earning etc., and ensure the policies/practices they develop or implement impact the business results. To be successful in managing stakeholders it is critical for C&B professional to believe in data, market intelligence, business acumen and financial knowledge.
What are the competencies required in a Total Rewards professional?
While Total Rewards continues to be part of the HR function, I see many finance professionals moving into this vertical successfully. For HR professional the move to this vertical is more of a learning stint for future growth and not necessarily to get developed as a domain expert. In my experience the following are the key skills or competencies that are required in a Total Rewards professional:
- Theory behind the practice, a professional course on C&B would be a great starting point.
- Computer & System skills, especially excel & power point,
- Data mining, market intelligence, and ability to develop an insight from these data point for business decisions;
- Business knowledge & acumen. Being a SME and also to earn the trust/ respect in the organization it is important for one to understand the business well;
- Stakeholder Management and the ability to understand what their needs;
- Have Resilience. Any new ideas, policy, practice would be rejected the first time. But if you truly believe in the idea and in its success, then keep working on it.
There is always a thin line between what’s enough and what’s not when it comes to defining a Total Rewards Strategy for an organization. What steps would you use to evaluate a total rewards strategy before rolling it out?
The word compensation literally means providing to cover loss for something of value and hence there cannot be a situation when anyone will say that the compensation was enough. Total Rewards Strategy should be based on the culture of the organization with an aim of attracting, motivating, retaining and engaging employees and not on managing individual aspirations.
The total reward strategy should be rolled out and evaluated and or re-evaluated based on:
- Business/HR Strategy
- Stage of the business
- Organization culture
- Talent Market
- Regulations or Statutory requirements
Re-validation of a strategy by influencers is an ongoing process and the Total Rewards strategy will need to change to keep pace with the new trends in the market. Is being a day zero company at the leading business school a business need or just good feeling? One needs to be pro-active and innovative to influence changes in that. Emerging markets in Asia Pacific are the most challenging, primarily due to economic conditions and talent availability.
From among the many employee benefits schemes implemented by you, which have been the most successful ones?
Though there have been many schemes which have impacted the lives of the employees in more ways than one, however from my entire corporate journey, I’d like to talk about these two:
Employee Stock Purchase Plan: Developed as a Long Term benefits for employees, it provides an opportunity for employees benefit from organization’s financial growth and prudence. If an employee opts for this scheme they can become share-owners at a discounted price. This was taken up really well by the employees and in a short period the participation rate went from 0% to 34% in thirty six months.
Employee Flexi Plan: Another key scheme which is close to my heart is that of giving a flexi benefits plan to employees. They could use it for school fees, or for health covers or for books/periodicals- whichever way they felt like using that money. This gave a lot of flexibility to employees. Employees would come to me and say how this flexi kitty helped them during a medical emergency at home.
Not always we will be able to quantify success of a program with increased participation rates and hence sometime qualitative feedback on a benefit scheme define the true success.