Read about the latest trends in HR under one umbrella
Read about the latest trends in HR under one umbrella
Let us start with a “Connect” question as the seasoned quiz masters would do to spice up the quiz competitions.
Attrition has reached levels (in higher twenties in percentage) that have been unheard of, and talent acquisition efforts have never been tougher. This has led to an unintended consequence.
HR Tech companies are observing a spike in the interest levels in a hitherto unheralded module in the HRMS platform namely, Compensation and Benefits, or Comp & Ben for short. While Payroll is considered to be integral to HRMS; Comp & Ben most of the time remains in its shadow. However, companies (with less than 6,000 employees) seem to be assessing this need in the current times while evaluating SaaS-based HRMS platforms. Here, the generously funded start-ups are leading the way and so also the traditional IT Services companies.
The funding for the Indian start-up ecosystem, in particular, has been nothing short of being epical. It boasts of having birthed 76 “unicorns” to date and 38 of them coming up in 2021. India is in the throes of technology disruption. More users are shopping, paying, gaming, and living online. Added to this, companies have to obsess over the competition. At play is a compressed timeline to achieve significant business milestones most of the time driven by investors’ pressure.
The pandemic brought in the collateral yet surprising benefit to the IT services companies -increased number of projects, to cater to digitization initiatives the world over, hence more work is moving offshore. The perfecting of the WFH model results in productivity enhancements and healthy margins and creates a virtuous cycle of demand.
Technology has to play the role to manage the growth, helping scale up and warding off competition. Again, start-ups have to compete with established IT services companies and core industry verticals for talent.
So, the question is why should Comp & Ben garner the seemingly timely interest? This module is expected to be an ally of the HR managers these days when the classical Cause and Effect phenomenon is seemingly playing out.
Let us dig deeper. The talent which is making its way to the current job market is the millennials and GenZ and the jobs are in emerging technologies.
Empirical data suggests millennials are currently the largest generation at work and will reach an estimated 75% of the labour force by 2025. Studies have shown that millennials hold slightly different attitudes toward work when compared with previous generations. They more readily change jobs and are generally less committed to their organizations, with an estimated 66% of millennial employees planning to leave their current company within 5 years. These significant differences in work values make attrition higher, acquisition tougher, and longer. So, the change would be necessary for the current approaches in HRM to the compensation and benefits packages. The need is to better align with these changing values. This makes the Comp & Ben module get the spotlight.
Organizations must consider the challenges that come with recruiting and retaining millennial employees. The first suggestion is to increase opportunities for leisure and increase work-life balance through job redesign. The second is to provide a mix of pay and benefits that is customized to the needs of employees. Last, feedback and recognition need to be given on an ongoing basis. If considered and deployed, these suggestions could support the ultimate goals of increasing engagement and reducing turnover intentions for all employees.
The work attitudes and behaviours are a far cry from a decade ago, which when coupled with a surge in demand for talent in emerging technologies has distorted the talent supply chain. HR managers and more specifically Comp & Ben managers are dusting off the theories of social comparison and equity theories, as they look for ways to attract and retain talent. Creative design of policies could reduce workplace disengagement, improve emotional connections and hence enhance engagement levels. This would reshape the Comp & Ben and be facilitated by the module.
HRMS platforms on SaaS have been a favourite among small and medium enterprises and start-ups. The start-ups have to assemble a quality management team that the venture capitalists demand. The search for the team structure for the troika of the Hacker (CTO), the Hipster (Marketing), and the Hustler (CEO) though not easy, needs to begin in real earnest.
Despite the efforts made by governments, companies, and other institutions, tech profiles remain insufficient to meet the full demand and this is globally true. These profiles require a great deal of practical technical knowledge, which is not always acquired in universities, but with experience in the field.
This queers the pitch of managing growth.
HRM in companies comprises HR generalists and specialists. Specialists like the Talent Acquisition experts (euphemism for Recruiters) have to work in tandem with the Comp & Ben Admin experts. Being creative in hiring, onboarding, and more importantly retaining the talent is critical now, more than ever.
This is the scenario that has brought to the fore the Compensation and Benefits module in a typical HRMS application.
Selecting an appropriate Comp & Ben application is paramount. HR Tech practitioners can help companies identify the best tools, keeping the organization's perspectives and the talent acquisition and retention goals in mind. To manage the perplexing tension of attracting the best talent without impacting the cash flow yet meeting the demands of the business Comp & Ben needs to be adequately aligned. The perspectives need to be –
These functional areas could be at times met by a hybrid arrangement of the Comp & Ben module and point applications addressing the contingent needs of an organization.
Compensation is more than a paycheck (addressed by the Payroll module). Benefits cover indirect pay. This can be health insurance, stock options, retirement plans, any myriad of things offered to employees. All of these things are critical in any job offer. Two jobs that offer identical salaries may vary wildly in the benefits category, making one a better financial proposition than the other. New age employees need to be motivated and these indirect, yet influential items have a more than fair share of play. When start-ups and small and medium enterprises compete for Talent, they have to support their Employer brand with an optimal Comp & Ben plan.
These are tough times when it comes to Talent Acquisition and Retention, however, a well-designed Comp & Ben plan can go a long way in providing the necessary aid to the HR Manager in coming up with creative options, assessing the effectiveness of the same, and make corrections as required. While Payroll management may have subsumed Comp & Ben as a module in the past, but the current times are giving the latter the spotlight it deserves.