GEO Texas Chapter Luncheon - Global Equity...program encourages employees to embrace flexibility with their schedules and work remotely. USAA USAA offers a strong 401k program with

GEO Texas Chapter LuncheonSeptember 2018

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Rewards Optimization DiscussionAllyson Kuper

Allyson KuperDeloitte Consulting, [email protected]+1.713.982.4579


Bersin High Impact Rewards and Human Capital Trends

What are companies doing now to address Rewards?

What are some outcomes we are seeing?

Today’s Discussion

Copyright © 2018 Deloitte Development LLC. All rights reserved. 4Copyright © 2018 Deloitte Development LLC. All rights reserved. 4

The symphonic C-suite: Behaving as a social enterprise demands an unprecedented level of cross-functional vision, connectivity, and collaboration from C-suite leaders.

Leadership Mindset

Bersin High Impact Rewards and Human Capital TrendsThis year, trends align to an overall leadership mindset, supported by three key themes, and 9 individual trends.

The Power of the Individual

The workforce ecosystem: moving

beyond the enterprise

New rewards: Personalized, agile,

and holistic

From careers to experiences: New

pathways

Filling Society’s Leadership Gap

The longevity dividend: Work in an era of 100-year lives

Citizenship and social impact: Society holds

the mirror

Well-being: A strategy and a responsibility

Leverage Technology for Sustainable Growth

AI, robotics, and automation: Put

humans in the loop

Hyper-connected workplace: Will

productivity reign?

People data: How far is too far?

3 Key Themes 2018 Human Capital Trends

2018 Human Capital Trends: The Rise of the Social Enterprise

Copyright © 2018 Deloitte Development LLC. All rights reserved. 5Copyright © 2018 Deloitte Development LLC. All rights reserved. 5

The symphonic C-suite: Behaving as a social enterprise demands an unprecedented level of cross-functional vision, connectivity, and collaboration from C-suite leaders.

Leadership Mindset

Bersin High Impact Rewards and Human Capital TrendsThis year, trends align to an overall leadership mindset, supported by three key themes, and 9 individual trends.

The Power of the Individual

The workforce ecosystem: moving

beyond the enterprise

From careers to experiences: New

pathways

Filling Society’s Leadership Gap

The longevity dividend: Work in an era of 100-year lives

Citizenship and social impact: Society holds

the mirror

Leverage Technology for Sustainable Growth

AI, robotics, and automation: Put

humans in the loop

Hyper-connected workplace: Will

productivity reign?

People data: How far is too far?

3 Key Themes 2018 Human Capital Trends

2018 Human Capital Trends: The Rise of the Social Enterprise

TODAY’S FOCUS

New rewards: Personalized, agile,

and holistic

Well-being: A strategy and a responsibility


10 Trends: Importance & Respondent Readiness2018 Human Capital Trends

Importance is apparent.


10 Trends: Importance & Respondent Readiness2018 Human Capital Trends

Importance is apparent.

Very few organization are

ready to address the importance of these

HR issues.


The importance of Rewards What does the research say?


Personalized, agile, and holistic2018 Human Capital Trends

organizations said their rewards program were “very effective” at creating a personalized, flexible solution

8%8% …yet only 9%9%were very ready to deal with

this challenge

In today’s workplace a personalized, agile and holistic rewards system is essential to attract, motivate and develop talent

91%91%companies still follow the conventional practice of conducting a salary reviews once a year – or even less often

37%37%Rated rewards as very important


Current effectiveness in driving business outcomesBersin High Impact Rewards

Rewards programs are NOT effective:• In motivating, growing and developing

talent• In attracting & retaining talent• In aligning rewards with business goals

• Only 21% would recommend their program to others

• The rewards function is alienating employees and undermining employment brand with organizations rating their rewards program with a net promoter score of -15

Rewards’ Perceived Effectiveness in Driving Business Outcomes


Top FindingsBersin High Impact Total Rewards Study


Aligned Strategy

Holistic Philosophy

6 Factors that influence Total Rewards maturity

Employee Focus

Team Rewards

Greater Frequency

Effective Communication

Top FindingsBersin High Impact Total Rewards Study

Mature rewards organizations listen, learn,and design offerings for their “customers.”

High-performing rewards teamseffectively collaborate with other internal functions, especially talent acquisition.

Mature rewards organizations take abroad and holistic view of “rewards.”

High-Impact Total Rewards is about “best fit,” not just “best practice.”


Question for the audience

What percentage of the workforce do you think believes they could get a better rewards package elsewhere?

•90%

•70%

•50%

•30%

•10%



What percentage of the workforce do you think believes they could get a better rewards package elsewhere?

•90%

•70%

•50%•30%

•10%


Why do these trends (and Rewards) matter?Rewards are critical to organizational performance, but employer spend does not always lead to a positive return on investment

This is because many organizations have not aligned their rewards programs to the needs, preferences, and priorities of their workforce.


Addressing Rewards NowWhat are companies doing now to address Rewards?


Benefits & Perks of 2017 Glassdoor Top 20 Companies

Swiss ReInsurance company Swiss Re’s “Own the Way You Work” program encourages employees to embrace flexibility with their schedules and work remotely.

USAA

USAA offers a strong 401k program with an 8 percent matching policy. According to SHRM, the average company in the US matches 6 percent.

MicrosoftMicrosoft offers an annual $800 “StayFit” reimbursement program to help cover the cost of gym memberships and fitness programs.

GenentechGenentech offers unique on-site amenities, including car washes, haircuts, childcare center, mobile spa and dentist

Scripps HealthScripps Health cares about the wellbeing of its employees’ furry family members, offering pet health insurance for cats and dogs.

IkeaOffers up to 4 months of paid parental leave to both part-time and full-time employees with at least one year of experience at the company, regardless of whether they work at a retail store or the corporate headquarters.

Source: Glassdoor.com’s Top 20 Benefits & Perks for 2017 Fortune’s 100 Best Companies


Previous organizational steps were not enough to understand workers’ preferences wholly

Understanding Worker Preferences

PEOPLESTRATEGY

COMPETITIVE ASSESSMENT

FINANCIAL IMPACT


Asking employees about their concerns is the last piece of the puzzle

Understanding Worker Preferences

PEOPLESTRATEGY

COMPETITIVE ASSESSMENT

FINANCIAL IMPACT

EMPLOYEE NEEDS

Employers are starting to ask about the employee’s concerns – not just benchmarking and a “race to the middle” for their rewards programs.


The transition from strictly standardized to highly personalizedUnderstanding Worker Preferences

Only 9%Only 9%of companies in the 2018 Bersin High Impact Rewards study reported that they use data and analysis, such as conjoint analysis, to a great or very great extent to understand employee preferences

of companies in the 2018 Human Capital Trends Report said their rewards program were “very effective” at creating a personalized, flexible solution

Only 8%Only 8%Why is this?

Companies must consider what employees want: agile compensation programs that provide raises, bonuses, and other customized incentives

more than once a year and beyond narrow tenure requirements.


Typical Rewards programs do not address the needs of employeesWorkforce Insights Survey

Aggregate results from example survey indicate that Medical Illness

is the largest concern for the employee population, relative to all

other items tested.

=Needs not addressed by typical rewards programs =Needs often addressed by typical rewards programs


Importance of actionable data

When you think about your rewards program, what is most important to you?

•Base pay

•Bonus opportunities

•Time off

•Retirement programs

•Medical benefits

•All of the above


When you think about your rewards program, what is most important to you?

•Base pay

•Bonus opportunities

•Time off

•Retirement programs

•Medical benefits

•All of the above

Importance of actionable data


Methodology provides richer, more actionable dataPreferences can be measured through a simple trade off-survey

Below is an example of a survey interface. Through a simple series of trade-off questions, you can gather rich insights into employee choice and preference.

Rethinking Employee Preferences to Drive Engagement and Minimize Burnout


A more strategic view of Rewards strategyRewards Optimization

Through Portfolio Analysis

• Determine the level of savings or investment required for making potential rewards program changes

• Reflect that cost constraint as a part of the data analysis

• Cost analysis is conducted through a working partnership

Through Multi-Phased Conjoint Analysis

• Ask employees to make ‘trade-offs’through a series of surveys to determine what is most important

• Identify drivers and sensitivity of preferences across the employee experience and for different reward elements

• Align preferences with cost for understanding of ROI

• Determines the optimal level of spend for rewards

• Opportunity to explore “Custom Package” scenarios

• Efficient Frontier outlining the optimal combination of potential reward features

Understanding Employee Value

Optimizing Employer Cost

Rewards Optimization


Prioritization of investments and program focus results in an opportunity to deliver more value and improved engagement

Rewards Optimization Efficient Frontier


Employer Success StoriesHow has this been executed and what can we apply this in our own organizations?


Consider this …

In your opinion, to what extent does your organization use data and analysis to understand employee preferences (e.g., conjoint analysis)?

• To a very great extent

• To a great extent

• To a large extent

• To a moderate extent

• To a small extent


Re-communicating or re-framing an existing rewards offering can be just as powerful as introducing a new reward

Maybe it is as simple as changing a perspective

5x life vs. 50% of pay for 10 yrs.


Practical applications of understanding preferences and rewards strategy

Case Studies

Turnover Retirement Millennials Work Pressures

Significant turnover in key workforce areas (such as

skilled nursing)

Ability to retire & Debt were the biggest concerns

for respondents due to immediate financial

obligations

Assumption that the youngest cohort of

workers do not value the pension benefit

Workforce that has felt like they have been asked

to take on moreresponsibility with fewer

resources

Implemented a unique solution to address the

challenge of aging parents

Implement an opportunity to shift 401(k) match dollars to a one time

bonus

Realization that the pension benefit is

recognized as a value driver even in the

Millennial generation

Implemented flexible schedule after realizing that this was something that could help address

these issues


The C-Suite has action items2018 Human Capital Trends

CEO CIO CHRO CFO CRO

The Role of HR

• Recognize that overhauling talent management is not complete without a corresponding overhaul of rewards

• Use analytics to determine what workers value in their rewards to appropriately align rewards programs and generate a market advantage for your organization

• Revisit your rewards approach on an ongoing basis to reflect the continuing evolution of the workforce and their priorities

As leaders, managers and contributors we have a role to play as well

The CHRO plays an important role in capitalizing on new rewards.


Questions


Financial WellbeingJoseph Rapanotti

Joseph RapanottiDeloitte Consulting, [email protected]+1.404.631.2898


Empowering employees’ well-being is a strategic imperative in today’s social enterprise and is a significant contributor to building an organization’s social capital1

Unified Wellbeing

46% of organizations surveyed say that well-being programs are a critical part of their employment brand

43% of organizations surveyed agree well-being reinforces their organization’s mission and vision – which is essential for younger generations

1 2018 Deloitte Consulting LLP “Human Capital Trends Report”

60% of organizations surveyed report a well-being strategy improves employee retention

61% of organizations surveyed believe a well-being strategy improves employee productivity and bottom-line results

86% of surveyed employees value a flexible schedule, with half of the organizations surveyed offering a flexible working program


Rewards is a critical part in the evolving definition of WellbeingUnified Wellbeing

2018 Deloitte Consulting LLP Bersin “High-Impact Rewards Study”

In many cases, the rewards function is alienating employees and undermining employment brand

Some organizations use a very broad definition: Everything an employee thinks about in terms of attraction and retention


We believe employers need to address all four pillars – Body, Mind, Wealth and Purpose – to maximize impact, empower continuous employee engagement and drive long-term sustainable performance

Unified Wellbeing

BodyHelping employees manage their physical health through vendors, programs and policies that are designed to promote:• Health Awareness and Monitoring• Chronic and Preventative Disease

Management• Forming Healthy Long-Term Behaviors

WealthEmployees require more than just a paycheck and retirement plan to manage their financial commitments, so organizations must expand their financial wellbeing programs to assist with: • Financial Planning Assistance• Debt / Problem Management• Benefits Optimization

PurposeEmployee are looking for a diverse, inclusive and accepting environment, creating a fulfilling experience at work, and outside the office, with programs focused on:• Rewards and Recognition • Career Coaching and Leadership

Trainings• Community Involvement and

Volunteerism

MindCompanies are now focusing on relieving stress in the workplace along with assisting employees to achieve a work-life balance through:• Employee Assistance Programs• Management of Mental Illness• Mindfulness and Resilience Programs

Unified Wellbeing


Many organizations find themselves in the early stages of providing Financial Wellbeing to their employees, but additional efforts can pave the way to an engaged Financial Wellbeing platform

Financial Wellbeing is a continuum

Early Stage Transitioning & Maturing Integrated, Managed & Productive

Education and Training

• Developing communications linking benefit programs to Financial Wellbeing activities

• Providing employees access to limited education materials

• Offering general financial education sessions

• Providing financial incentive for employees to actively participate in various wellbeing programs

• Delivering carefully constructed resources and communication by lifecycle (Hire-to-Retire)

• Offering education is one-on-one, as well as one-to-many

Services• Offering 401(k), but all

responsibility lies with the employee around education and enrollment

• Providing enhanced 401(k) with some additional/optional feature; auto-enrollment, auto-escalation

• Integrating health, financial & retirement programs into one holistic wellbeing program

• Engaging employees with incentives; Program outcomes measured; Direct focus on outcomes vs participation

Technology and Tools

• Offering retirement provider website tools via existing Defined Contribution (DC) vendor

• Offering financial advice online through selected vendor

• Making available basic retirement planning tools

• Providing an integrated tool set that compiles full financial portfolio and can progress and show “big” picture and track progress


Employers today should consider creating a Financial Wellbeing program that consider the different generational perspectives and situations of a multi-generational workforce

Understanding employee’s Financial Wellbeing needs

Recruitment (Ages 20-25)

Mid-Career (Ages 35-50)

Retirement Preparation

(Ages 50-65)

Early Career (Ages 25-35)

Retirement (Ages 65+)

Ob

ject

ives

Ch

alle

ng

esR

elev

ant

Top

ics

• Communicate value proposition

• Educate on available resources

• Emphasize focus on financial literacy

• Build awareness and educate about financial / retirement planning

• Establish prudent spending / saving habits

• Leverage financial planning resources

• Begin retirement planning

• Messaging from other employers

• Current debt (e.g., student loans, housing, car)

• Potential information overload

• Offer financial planning

• Execute prudent spending

• Maintain savings for retirement

• Determine retirement income needs

• Consider optimal retirement age

• Identify potential roadblocks to retirement

• Envision personal retirement scenarios

• Maintain income stream over lifetime

• Stay connected to employer

• Minimize financial risk

• Factor in likely healthcare costs

• Desire to spend on near-term purchases

• Busy establishing one's home, family, community life

• Current debt (e.g., student loans, housing)

• Current debt and increased costs (e.g., mortgage, cars, child’s education)

• Establishing and maintaining focus on retirement

• Allocating financial resources to meet retirement goals

• Current debt (e.g., child’s education, elder care)

• Psychology of retirement

• Maintaining contact with employer

• Managing income spend down


• Budgeting and saving

• Debt


• Savings/investments (building cash reserve, IRA, savings plan)

• Managing debt (student loans, credit card debt, mortgage

• Retirement planning

• Investments

• Basic estate planning

• Insurance

• Tax planning

• Education funds

• Retirement planning

• Retirement election and sourcing

• Investments

• Tax planning


• Advanced estate planning

• Tax planning

• Investments




What percentage of companies that issue stock awards and options do you think cite financial wellness as the objective of the Plan?

• 42%

• 27%

• 15%

• 7%



What percentage of companies that issue stock awards and options do you think cite financial wellness as the objective of the Plan?1

• 42%

• 27%• 15%

• 7%

1 2016 Deloitte Consulting LLP and NASPP “Domestic Stock Plan Design Survey”

9% state financial wellness as a top 3 priority


While stock-based compensation is one part of the total compensation package, it’s an important part in short and long-term wealth planning

Understanding the role of stock-based compensation in wellbeing

Base pay such as hourly rate, annual salary

Variable cash such as short term incentives, commission payments, spot bonuses

Long term incentives such as equity (SO, RSU, RS, PSU) programs, stock purchase programs, deferred compensation

Make compensation a deliberate part of the organization’s employee financial wellbeing vision

When asked what helps to lower their financial stress, equity compensation is favored amongst the majority of employees1

1 2018 Schwab Stock Plan Services, Inc. “Equity Compensation Plan Participant Survey”

Fin

anci

al W

ellb

ein

g V

isio

n

2 2018 Deloitte Consulting LLP Bersin “High-Impact Rewards Study”



On average, how many companies do you think offer an Employee Stock Purchase Program?

• 70%

• 52%

• 33%

• 15%



On average, how many companies do you think offer an Employee Stock Purchase Program?

• 70%

• 52%• 33%

• 15%

1 2016 Deloitte Consulting LLP and NASPP “Domestic Stock Plan Design Survey”


Employers can differentiate themselves by providing impactful support across unified wellbeing creating and supporting a culture of engagement

Case Study: What can organizations do to differentiate themselves?

Identifying opportunities to maximize the investment of wellbeing programs focusing on value and utilization

Creating a single program, containing all wellbeing services, applications and communications which fulfills all pillars of wellbeing

1234

Finding the correct vendors and programs to support the needs of the workforce

Pinpointing programs to targeted groups of employees to achieve a personalized experience which promotes sustained engagement


Questions

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This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Copyright © 2018 Deloitte Development LLC. All rights reserved.36 USC 220506

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GEO Texas Chapter Luncheon - Global Equity...program encourages employees to embrace flexibility with their schedules and work remotely. USAA USAA offers a strong 401k program with