According to a press release on the survey results, nearly three-quarters of the 413 U.S. human resources professionals surveyed cited talent as their top concern, while 71% identified cost containment of health care as a top five concern this year – dropping from 80% last year. Other leading concerns are the willingness of employees to pay for an increasing portion of benefit plan coverage and to manage their own reward budget (58%), clear alignment of total rewards strategy with business strategy and brand (56%), and demonstrating appropriate return on investment for reward expenditures (42%).
From an employee perspective, survey respondents pointed to economic security in retirement and financial growth opportunities before retirement as primary areas of concern, the release said. Forty-two percent of respondents cited the “ability to afford retirement, including post-retirement health care,” as the most important area of concern to employees, while “ability to earn additional rewards that allow oneself to stay on top of inflation and advance in real economic terms” was cited by 26%.
Growing concern over retirement is replacing angst about employees’ cost of health care benefits, which has slid from the biggest worry of 20% of survey respondents in 2005 to only 8% in 2008. However, even though employers recognize employee concerns about retirement, when asked to name their top total rewards challenges for their organization, only 2% mentioned “the cost of providing retirement benefits to employees,” and only 1% picked “the ability of our employees to retire.”
Overall, 84% of survey respondents (versus 70% a year ago) expect to make changes in the specific elements of their total rewards program or strategy; new differentiation of total rewards by business unit or workforce segment; or new alignment with the employment brand. Nearly three-fourths (71%) of survey respondents plan to “increase employee communication and education surrounding our reward programs,” and a majority (56%) plan to “redesign some of our reward programs to better align the interest of employees and the organization and promote employee engagement.”
When asked whether they have made or are planning to make changes to their total rewards programs with generational preferences in mind, nearly one-third of respondents (32%) said they were.
“While cost reduction is an important employer motivation for emphasizing consumerism, the customization of rewards strategies is also being driven by the convergence of powerful workforce trends, such as the shrinking pool of skilled labor, the increasing impact of technology, and the evolving expectations of Generations X and Y,” said Dick Kleinert, a principal in Deloitte’s Human Capital service area and co-director, in the press release.
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