Amid a tight global labor market, employers are increasingly recognizing the need to differentiate themselves to attract and retain talent by offering various compensation solutions, according to a new study.
The ADP Research Institute’s “Evolution of Pay” study identified a growing demand for new payment options, based on responses from 4,000 employees and 2,900 employers across 13 countries.
According to the study, 78% of employers surveyed agreed that organizations will need to customize payment options to remain competitive in the war for talent. Meanwhile, 62% of employees said off-cycle pay options, such as the ability to choose pay frequency, would make a difference when considering a job offer.
“From raises, to robust benefits and workplace perks, employers today are using every opportunity to attract and engage talent,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “However, our research shows raises and benefits are not the only perks employers should consider if they want to remain competitive. Employees are seeking companies that offer access to alternative pay methods and financial wellness offerings when they assess a job offer. Further, with many Millennials and Gen Z more aware of their personal finances, the ability to help with savings is a top priority for employees.”
New & Non-Traditional Payment Options are Necessary
- Globally, employees are urging employers to offer unconventional payment methods.
- 79% are willing to accept payment from their employer via mobile, digital or prepaid paycard.
- 97% of employees prefer not to receive paper checks from their employers.
Looking ahead, 93% of workers believe employers will pay them via paycards, digital platforms or mobile wallets 10 years from now.
Factor in Financial Wellness
Employee expectations for financial wellness offerings at work are growing.
- 79% of employees say they want to work for an employer that cares about their financial wellness.
- 90% of Millennial employees are willing to share at least some personal information (i.e., spending habits, bank balances and family/healthcare needs) with their payroll provider to track finances and receive advice.
- Nearly all employers surveyed (98%) agree that employee financial wellness has a direct impact on their organization in some way, especially concerning productivity (67%) and engagement (62%).
Internal Options Unprepared for Future C-Suite Openings
A growing trend exists within many organizations that could leave them vulnerable in the future.
According to a Korn Ferry survey of C-suite executives in companies across the globe, there is a shortfall issue, with 77% of respondents saying there is not an internal ready-now successor for their role.
Korn Ferry surveyed executives across several C-suite roles, including CEOs, CFOs, CHROs, CMOs and CTOs. Nearly half (42%) of respondents say their organization does not have a comprehensive succession plan for their role.
“Often organizations are so busy trying to outpace the competition and provide value for customers and shareholders that they don’t take the time needed to plan for the future,” said John Petzold, Korn Ferry senior client partner and leader of the firm’s CXO Optimization Practice. “An exodus of a senior leader could be unplanned and swift, which could leave organizations vulnerable if a ready-now successor isn’t already identified and developed.”
Chief Executive Officers (CEOs)
Of the 222 CEOs who participated in the Pulse Survey, 76% said there is not a ready-now successor for their role, and only 40% believe there is a comprehensive succession plan for their position.
Chief Financial Officers (CFOs)
The 2019 CFO Pulse Survey of 222 chief financial officers found that when planning for a successor, only 38% of CFOs believe they have a comprehensive succession plan, and 80% do not feel there is a ready-now successor for their role.
Chief Technology Officers (CTOs)
The Korn Ferry Technology Officer Pulse Survey of 194 technology officers found that 71% said they do not feel there is an internal ready-now successor for their role. In addition, 41% of technology officers do not feel they have a comprehensive succession plan.
Chief Marketing Officers (CMOs)
Korn Ferry’s survey of more than 200 marketing leaders found there is a looming leadership crisis facing the function, with 84% of CMO respondents saying there is not an internal ready-now successor for their role and only 41% believing there is a comprehensive succession plan. Compounding the of lack of successorship issue is the historically short tenure of CMOs.
The survey also found that 41% of CMOs see strategic thinking as the top capability gap they are focused on developing in their direct reports.
Chief Human Resources Officers (CHROs)
The 2019 CHRO Pulse Survey of 193 chief human resources officers found that CHROs are concerned about who will succeed them, with 76% of respondents saying they do not feel there is an internal ready-now successor for their role, and only about half (52%) reporting they have a comprehensive succession plan. In addition, when asked about the capability gap that they are most focused on developing in their direct reports, 44% said strategic thinking.
Cost of Living Driving U.S. Employees to Push for Remote Work
Soaring housing prices in large U.S. tech hubs is causing many employees to rethink their work situation.
A Citrix Systems survey of 5,000 knowledge workers found that 70% who live in urban locales would move to outlying areas if they could perform their jobs at the same level.
Thus, it would behoove organizations to have a remote work model in place.
“Traditional work models, where work is organized around a hub like a call center or office building, are fundamentally broken, creating a frustrating employee experience and exacerbating the war for talent,” said Tim Minahan, executive vice president of strategy and chief marketing officer at Citrix. “People today want to work where they want to work. And to attract them, companies need to rethink what the workplace means and create a more flexible way to work that enables them to get the right people in the right places to unlock innovation, engage customers and move their business forward.”
More than half of those polled (58%) cited the costs of city living as “crippling.” As a result, they’re ready to move. 70% of workers currently living in cities stated they would be very likely/fairly likely to consider relocating to suburban or rural areas if they knew their professional life wouldn’t suffer and they could still perform their role to the same level.
Of those who participated in the survey, 31% indicated that sourcing talent for skilled positions is an issue in their organization and 18% suggested it’s likely to become one in the next five years. Many are taking steps to try to attract a broader range of talent including:
- Increasing wages for skilled roles (36%).
- Actively promoting diversity initiatives to encourage applications from a range of backgrounds (28%).
- Investing in education and training programs, outside of city locations (20%).
The real ticket to finding and keeping people lies in enabling flexible and remote work:
- 85% of respondents believe they could do their job just as effectively from anywhere.
- 62% of those not already working remotely believe that they could work away from the office at least one day per week.
And they see a number of positives in remote work:
- 69% said working remote would enable them to be more productive and focused.
- 83% think it would enable them to strike a healthier work-life balance.
- 77% indicated they could save money by reducing commuting costs.
Companies are beginning to embrace the notion that to get the people they want and need to make their business succeed, they’ll need to rethink the traditional workplace and employee experience. To that end 35% of respondents said they are introducing better flex/remote work policies to widen the talent pool, and 31% are searching for talent nationwide, including in rural areas.
Only 33% of workers polled currently work remotely at least one day per week. What’s holding them back?
- Connectivity was cited as a key challenge by 58% of respondents who said the current quality of broadband negatively impacts their ability to reliably work from home.
UK’s Impending Brexit Leading to Job Cuts
The United Kingdom is scheduled to leave the European Union in the fall and that impending departure is causing organizations to eliminate jobs, according to a Glassdoor survey of more than 1,000 UK workers.
With Brexit constantly in the news, employees are clearly conscious of the impact this is having on their employer. Half of employees (50%) said that Brexit has had a negative impact on their company's financial performance. And nearly half (49%) said they believe their company will make redundancies over the next year.
In a sign that many people are fearful for their job security, nearly half of employees (48%) said they are worried their job may be made redundant over the next 12 months. Workers ages 18 to 44 are more likely than those ages 45 and up to be worried about job security (59% vs. 33%). These fears may be leading to a change in spending habits as a precautionary measure.
57% of employees surveyed said they have consciously reduced the amount of money they spend every month in case their job is made redundant. Again, this is more prevalent among employees ages 18 to 34 (68%) and those ages 35 to 44 (65%), compared to those ages 55 and up (35%).
“Many UK employees are anticipating job cuts and are naturally concerned, prompting them to reduce their financial outgoings. Despite current low unemployment levels, this likely means the UK labour market is experiencing uncertainty and that looks set to continue well into the next financial year,” said John Lamphiere, EMEA managing director at Glassdoor. “With roughly half the workforce worried about Brexit having a negative financial impact on their employer, it might be a good time for companies to engage with their employees to reassure them about jobs, growth and business momentum.”
In terms of looking for a new job, about two thirds (62%) of employees said they do not plan to search for a new job until the job market looks more positive.