Dive Brief:
- A new WorldatWork study on the future of work found that the tight labor market, along with talent shortages, is expected to lead to increases in total rewards, including substantial raises in base and variable pay for employees who can compete in the future marketplace.
- According to respondents in The Future of Work and Rewards, the largest increase in total rewards during the next three to five years will be in career development and flexible work schedules. Both rewards will be significantly impacted by technology, marketplace shifts and pay preferences.
- In other study results, respondents said that the heightened ability to measure work quality and quantity will increase incentive/variable pay and nearly half (46%) said employers will respond to a more transient workforce by offering more flexible scheduling.
Dive Insight:
Future pay increases, following a long period of stagnant wages, will be a change the workforce has long anticipated — and a trend economists have long expected, especially with a tight labor market in play.
The most significant increases are likely slated for workers with the highest-level, largely tech-based skills resulting from automation. But even retailers have been forced to up the ante on their total rewards programs, adding better employee development programs and paid leave to their benefits offerings as well as increasing base wages, to keep up in the war for talent.
Generally, organizations are paying attention to employees' preferences and responding with voluntary benefits, development opportunities, flexible work schedules, recognition programs and other perquisites through their total rewards policies and practices. More workers are seeking more control over their work, and employers have had to adjust their rewards programs to more strategically meet that demand while maintaining performance.
As organizations look to the future of work, the strategies they put in place now to enhance the employee experience and allow for flexibility could result in a significant return on investment (ROI) in just a few years.
