Total Rewards Strategy for a Diverse, Intergenerational Workforce

Transcription

1 6 April 2011 Total Rewards Strategy for a Diverse, Intergenerational Workforce Su-Yen Wong Senior Partner and Managing Director ASEAN su-yen.wong@mercer.com

2 About

3 A global leader in HR consulting, outsourcing and investments Global Leader Over 23,000 clients Over 20,000 staff worldwide Offices in over 40 countries A 65-year history US$3.3 Billion in revenue Core Capabilities Retirement Health and benefits Human capital Surveys and products Communication Investment consulting Investment management Outsourcing Mergers and acquisitions i2

4 Our reputation and industry recognition Widely recognized for excellence and expertise worldwide Benefits Consultant of the Year World s largest employee benefits consulting firm for 24 th consecutive year Top 20 HRO Provider Benefits Consultant of the Year Winner, Investment Consulting and Actuarial Consulting Winner of Hong Kong's Retirement System Redesign Competition Best Enterprise Human Resources Outsourcing Vendor Singapore Human Resources Vendors of the Year #1 Compensation & Benefits Consultant #1 Employee Healthcare Consultant #1 Succession Planning Firm #2 Employee Insurance Consultant #2 HR Outsourcing Consultant European Investment Consultant of the Year #1 HR Consultancy to work for Winner, Ten Best Companies To Work For i3

5 Background and context

6 Global Economic Outlook: Asia continues to fuel growth 8 GDP - Global and Regional (forecast) 2012 (forecast) -4-6 World US Europe Area Asia Pacific Source: Asia Pacific Executive Brief (March 2011) i5

7 Vietnam s economy maintains positive growth Despite global financial crisis 23.1% GDP Growth Inflation 11.0% 9.2% 10.0% 6.3% 6.7% 5.3% 6.8% 7.5% 7.8% (forecast) 2012 (forecast) Source: Asia Pacific Executive Brief (March 2011) i6

8 Fast aging workforce contributes to shrinking labor pool Source: United Nations Population Division i7

9 Rapidly aging population in Asia Life expectancy is increasing including in Vietnam is not responsible for any opinion or statement made by third parties i8

10 Decreasing fertility Number of children per women has fallen from 7.3 in 1965 to 2.1, and is forecast to fall to 1.9, where it is expected to stay until 2044 i9

11 The consequence? War for Talent 10 i

12 The Intergenerational Workforce

13 Defining the generations Baby Boomers Born Generation X Born Traditionalists Born pre-1946 Generation Y Born i

14 Diverse intergenerational workforce Traditionalists pre-1946 Stable, loyal, hardworking, longer adoption curve for technology, slower to change/risk, mentors Boomers Experienced, relationship builders, service oriented, driven, process before results, dislike conflicts Gen-X Technology literate, not intimidated by authority, creative, less experienced, skeptical, impatient Gen-Y Technology savvy, team-oriented, global mindset, multi-taskers, opinionated, need structure Four generations coexisting in the workplace Sources: The Continuing Generational Shift in the Workforce. Rainmaker Thinking, Inc. Newsletter, 118th Edition, March 15,2005; Generations at Work: Managing the Clash of Veterans, Boomers, Xers, and Nexters in your Workplace 13 i

15 Different attitudes towards technology 14 i

16 Mobility Distance no object Some of the world s more important current migration routes ATLANTIC OCEAN PACIFIC OCEAN INDIAN OCEAN Sources: National Public Radio; The Economist 15 i

17 Health and wellness 16 i

18 Building an Employee Value Proposition

19 The employee value proposition Why should I work here? What s in it for me? Would I recommend the organization as an employer to others? 18 i

20 Segmenting the value proposition Employees are all different Retirement Children leave home Marriage Exit Workforce? Enter workforce Marriage Parenthood Start family Age Cash Vacation Car Training Life & medical House Career progression Childcare Pension/retirement Medical Work/life balance Children s college 19 i

21 Challenges of Moving Towards an Effective Total Rewards Framework Organizations have not identified the true reasons for employee movement in, through and out of the organization Plan designs often do not reflect employee preferences Focus is only on cost reduction and does not consider performance improvement, talent impact or non-financial rewards Approach is too narrow in scope by considering only some of the rewards components Minimal recognition of diverse employee demographics Decisions are often made in isolation without stakeholder support Analyses are performed without sufficient rigor and rely upon generic designs Communication is an afterthought 20 i

22 Hence the value of total rewards elements differ by generation Traditionalists Boomers Generation X Generation Y Compensation Base Pay Short-Term Incentives Long-Term Incentives / Deferred Comp Recognition Benefits Retirement Health & Welfare Perquisites Careers & Development Performance Management Career Pathing Training Programs Global Mobility Work Lifestyle Time-off Alternative Work Arrangements Source: experience and studies on Human Capital perspectives by generation 21 i

23 What Generation Y in Finance say 3,200 Gen Y finance professionals across 122 countries Source: and ACCA joint research paper Generation Y: Realising the Potential 22 i

24 Developing a Total Rewards Strategy: Four Perspectives COST PERSPECTIVE Can the rewards programs designed to support the desired strategy be provided at an affordable and sustainable cost If not, how should they be modified to be financially viable? EXTERNAL PERSPECTIVE What are the labor and related rewards environments in which the company competes? How do they influence or constrain rewards practices that the company may wish to adopt? EMPLOYER PERSPECTIVE What are workforce needs in terms of structure, behavior, capabilities and performance? How should the rewards programs be designed and delivered in order to secure those workforce outcomes? EMPLOYEE PERSPECTIVE What creates a compelling place to work in the eyes of employees? What does or should differentiate it from competing employment opportunities? How do employees place value on the current rewards package? 23 i

25