The Towers Watson 2012-13 Global Talent Management and Rewards Study revealed the current economic climate is a crucial turning point for business around the world.
According to IT Business Net, a new book by Lorin Hitt and Prasanna Tambe, and CEO of CareerBuilder Matt Ferguson, “The Talent Equation,” found that 8 out of 10 employers worry about the burgeoning skills gap as a growing profit and production killer. However, data from the book’s research supports a projection of a 4.4 percent increase in people in the workforce between 2013 and 2017.
With volatile markets seen in nearly every industry worldwide, the report urges companies that the time for revision of hiring and retention policies due to a widening skills gap is now. Firms have noticed the skills gap is growing, and companies are increasingly finding it harder to find talent.
But what’s the best way to attract talent? Financial compensation reward programs are, according to the survey.
Key findings from the study include:
- Almost 75 percent of companies reported attraction of qualified employees was a significant challenge, with approximately 50 percent of those same organizations reporting issues with talent sustainability.
- Design consistency for financially high-performing companies was 20-30 percent higher within a global talent management and rewards framework than design consistency demonstrated by their counterparts.
ICM structures often lacking:
The survey revealed U.S. companies remain steadfast in managing expenses and boosting productivity, putting less emphasis on strategies to attract skilled talent. The survey made the recommendation for North American employers to design creative rewards programs in order to sustain a competitive workforce amid a period of mild economic turmoil.
Here are some key findings from infographics related to data found from the 2012-13 Global Talent Management and Rewards Survey:
Incentive based pay flaws
- Many companies are paying their talent the status quo, essentially equating their yearly incentive programs to de facto profit-sharing plans
- Employees who fail to meet performance expectations are awarded by 24 percent of employers, while 18 percent receive the same payout regardless of their work achievements
Annual incentives disappoint
- Less than 50 percent of employees agree that their job performance will garner rewards
- Companies often assume that making available an array of short-term incentives to employees will attract top talent. However, data from the infographic shows that short-term incentives rank 22nd out of 27 reasons people join a firm and 15th for why they stay with a company.
- The incentive strategies currently used by many employers fall short due to companies consistently falling below what they have budgeted for annual incentive funding. The U.S. has been under it’s target seven of the last nine years, while Canada trails along with 6 out of 7 years.
If companies opt to restrategize and revise their incentive compensation structures to account for an employee’s ability to meet or fall below job expectations, top earners would be top performers. This model maximizes on company profitability and elite talent acquisition and retention.
