Transforming work and Total Rewards

Reimagining work and culture

The pandemic accelerated already ongoing trends to adopt flexible work practices, automation and digitalization, and virtual customer outreach and service delivery as well as to use alternate sources of talent, such as talent sharing and contingent workers. These changes are requiring employees and managers to learn new skills. For example, employees are learning how to interact effectively with dispersed teams with flexible schedules, use digital collaboration tools, manage tasks, and create and maintain virtual networks.

Leaders are quick to point out that, while flexible work is likely to be the new norm, it will vary extensively by the organization’s culture, the type of work and employee preferences. It also will need to be carefully balanced with business needs and the additional complexities and costs that flexibility incurs. This will mean balancing employee experience with the need for controls to maintain fairness and consistency of policies.

This change is not merely about doing things differently; it represents a fundamental shift in work cultures that have been entrenched over decades. Organizational cultures are built on the mindset and behaviors that shape and reflect life in an organization, employee experiences and personal connections.

Role of managers in enabling change

For managers, leading remote and hybrid teams, managing flexible work arrangements and using contingent talent requires careful planning as well as agility, effective allocation of resources, project discipline and time management to complete tasks. For organizations where any level of virtual workplace is retained, managers will need to find new ways to create a positive employee experience while assessing and managing the performance of teams that work differently.

As organizations adopt new ways of working, employees and managers will be working differently and will need to be accommodating and accepting of how their colleagues work. Managers also will need to recognize and address the importance of increasing flexibility around career progression. This highlights the requirement for leaders to commit to this significant cultural shift that also includes a mindset — and actions — that embrace greater diversity, equity and inclusion (DEI). Arguably, there will be different challenges and new norms of collaboration to achieve a sense of inclusion with less day-to-day physical interaction than in the past.

Realigning Total Rewards

Organizations also are studying what reimagined and more flexible work will mean for their Total Rewards (pay, benefits, career and wellbeing) programs. For example, there are pay considerations such as how (and if) compensation strategies should reflect the economic value of flexibility, whether rewards should put greater emphasis on collective performance of teams to encourage collaboration and to avoid the potential bias toward rewarding those who work in the office rather than remotely, whether pay-for-skills becomes more relevant for some workers and how to address geographic pay differentials. Further, tax complications can arise for both the organization and employees when employees work in different cities, states, provinces and countries from host locations. For benefits, there are considerations around providing health care on a more distributed network or virtually; how to provide more tailored benefits to meet the needs of a broader variety of workers with varied preferences and personal circumstances (e.g., transient workers, those who take career breaks); how to offer more flexible retirement and financial security programs; and how to ensure health- and wealth-related benefits are fair, inclusive and accessible.

Similarly, as more people are expected to work routinely from home, they will need technology support, ergonomic setups and relevant safety policies. Leave, benefits and wellbeing programs may need to be personalized to reflect new work arrangements and geographically dispersed teams. For example, organizations will need to consider how to provide health benefits to employees who do not reside in the same city or country as their work location, and how to support mental health and emotional wellbeing remotely. Employers also will need to develop new approaches and criteria (e.g., virtual capability) for vendor assessment as new providers enter markets or develop innovative solutions across the spectrum of Total Rewards.

In general, employers are being mindful of incorporating fairness in Total Rewards to address factors beyond gender and racial gaps, such as the diversity of work styles, flexibility preferences, and roles and responsibilities. This focus is likely to further reshape pay, health and wealth benefits, and career programs in unprecedented ways in the post-pandemic era and to further connect Total Rewards to wellbeing, DEI, new ways of working and the employee experience.

Actions organizations should consider

• Identify work for redesign (e.g., high incumbent roles, pivotal roles) and set reinvention goals.
• Identify areas to enhance flexible work practices/policies for greater effectiveness, equity and access.
• Optimize work with talent and automation alternatives, reflecting diversity, equity and inclusion (DEI) objectives.
• Test with leaders to understand the mindset, capabilities and infrastructure gaps to address.
• Build a road map for implementation, including prioritizing activities to effectively enable new ways of working.
• Evaluate knock-on impact on risk profiles of work and develop risk management/risk transfer strategies.

• Identify how work is changing, and leverage machine learning to uncover work and skill requirements.
• Map competencies, knowledge and skills to career frameworks.
• Activate the career experience by providing employees with transparency around work and skills, and defined reskilling, upskilling and out-skilling pathways.

• Support leaders and managers in improving their capabilities to be proactive and effective during change, transformation and more flexible career progression (such as development assessment, coaching and action planning).
• Provide broad-based manager support through new ways of working, such as leading remote and hybrid teams, providing playbooks and microsites for tools for work redesign, leading agile teams, and activating inclusive leadership and change management.
• Design training to build leader and manager resiliency and agility, staying connected, enabling new ways of working and maintaining drive.

• Determine how new ways of working can be a conduit for reinforcing organization values, principles and purpose (e.g., how do trust and integrity play out in a virtual world? How do employees feel connected to/find meaning in their work?).
• Consider whether program/practice/policy eligibility is equitable (e.g., are flexible work arrangements accessible to all employees?). Ensure that pay, health and wealth benefit, and career programs are aligned with culture transformation.
• Acknowledge work styles can represent new and unique employee cohorts in segmentation analyses. Assess employee preferences and needs; identify opportunities to optimize the employee experience. Remain agile as an organization and as leaders and be willing to adapt as work further evolves.

• Create inventory of Total Rewards programs; carry out competitive analysis of current Total Rewards programs against peer group and emerging best practices aligned with new ways of working and in-demand skills.
• Reimagine Total Rewards programs to align with new ways of working and flexible work arrangements, aligning with where, when, and how people work (and supporting through pay, health and wealth benefits, and career enablement programs).
• Develop new approaches and criteria (e.g., virtual capability) for vendor assessment given breadth of new entrants across the spectrum of Total Rewards.
• Identify opportunities to align Total Rewards strategy and/or programs with DEI agenda to ensure equity across the portfolio (i.e., equitable Total Rewards).
• Mine data and/or carry out employee listening strategies to understand employee views and preferences across demographic groups; leverage employee resource groups where applicable.
• Engage leadership in discussion on current state and desired future state and create design principles. Consider employee listening strategy for feedback on perceived value of program design.
• Assess current programs against desired future state and analyze gap. Create strategies and plans to close gaps, identify quick wins and longer-term actions required. Carry out Total Rewards Optimization (TRO) or Total Rewards Prioritization (TRP) analysis to understand how to align organization investment with employee priorities and perceptions of value, and on the return on investment; prioritize areas to change accordingly.

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Authors

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John M. Bremen

Chief Strategy, Innovation & Acceleration Officer, WTW

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Amol Mhatre

Global Head of Intellectual Capital, Research & Innovation, Health, Wealth & Career, WTW

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