Four Priorities for Total Rewards Leaders in 2023
Record-breaking inflation, worry about a global recession, which many believe is already underway, and an aggressively competitive talent market made 2022 a challenging year for members of i4cp’s Total Rewards Leader Board (TRLB). Looking ahead, setting competitive and resonant compensation and benefits in a continuously fluctuating and uncertain economic future remains a complex challenge. The top four priorities cited by members of our TRLB for 2023 are:
- Responding effectively to the ongoing challenges of an uncertain economy
- Assessing equitable compensation and pay transparency
- Customization of compensation and benefit strategies
- Focusing greater attention on workforce well-being
The total rewards function plays a significant role in an organization’s ability to field a skilled workforce now and into the future. Staying competitive demands close attention to external economic trends, responsiveness to shifts in the market and respective industry, and keenly understanding what is valuable to candidates and employees.
Wise total rewards leaders also keep close tabs on the practices and strategies of other organizations, to include compensation, bonuses, recognition, workplace flexibility, and career development opportunities. As one TRLB member noted: “Our most pressing priority is to ensure that we are aligned to market practice as it relates to our peer company responses to inflation and the impact it has on salary budget planning, unplanned off-cycle increases, and the use of lump-sum payments or other allowances.”
Dealing with the volatility of the economy (or multiple economies in the case of multinational or global companies) calls for agility, as well as the tricky balance of adjusting rewards offerings and strategies to attract and keep talent while, as the edict goes, “preserving profits and cash.” The idea of doing more with less—driving more impact and efficiencies with fewer people resources—is a clear mandate for total rewards leaders in the year ahead.
Another TRLB member described prioritizing her function’s “readiness for pay transparency, improving governance and structure to facilitate attraction and retention, and enhancing global total rewards programs to ensure comprehensive and highly competitive offerings for all demographic groups.” Her 2023 plans also include partnering internally to enhance and align marketing and communications related to the company’s total rewards offerings.
Adjusting to changes in work models (onsite/remote/ hybrid) have some total rewards leaders considering, or reconsidering their geographic strategies and the effects of greater work flexibility on compensation policies. This has sparked heated debate about the need for greater customization in compensation based on location, and greater focus on pay transparency, which, as one TRLB member noted is “changing the conversation between manager and employee, [so] we need to feel comfortable and confident in our training and approach.” Another noted that pay equity and transparency is an essential part of successful DE&I initiatives, and this should factor into pay transparency considerations going forward.
i4cp’s 2022 study, The Talent Imperative found that nearly half (49%) of those surveyed reported that their organizations are conducting pay/compensation equity audits in response to the competitive labor market. But staying competitive is not entirely about compensation. All members of the TRLB recognize that individual wellness and well-being are integral to employees’ abilities to accomplish their work, drive workplace innovation, and contribute to the accomplishment of organizational missions and goals.
In some cases, this simply means following through on groundwork total rewards leaders have laid already. In 2023, said one surveyed leader, “…we will be taking a much deeper dive into overall well-being (physical health, mental health, financial well-being, career development, etc.) to build on the investments we have made over the past year.” Part of this work will undoubtedly entail new well-being and mental health solutions to help prevent burnout and build resiliency.
As total rewards leaders rise to the challenges that await their organizations in 2023, it’s clear that there is much work to be done. In the total rewards space, leaders’ priorities speak to their dedication to support the business, to take the function’s value propositions to new levels, and to maximize resources in ways that deliver supportive, personalized experiences to employees.
For our four predictions and priorities for other human capital functions, download the full 2023 Priorities & Predictions report.