Total Rewards Trends for 2024– Navneet Mukund, Director- HR Consulting Asia, Mercer
We are at a very important juncture looking back at almost the full two years of the economic recovery phase post three waves of 2020, 2021, and early 2022 Omicron variant. And whenever it was almost safe to be smug about it, geopolitics turbulence and flares kept always putting headwinds to dampen the growth.
Despite this, 2024 is poised to be a great recovery year from the lows of high inflation and low GDP growth in most countries. All markers are currently looking green.
In the exciting world of HR, total rewards are directly and immediately impacted by economic and labour market trends. Here are some of the most likely trends that should be expected and prepared for:-
Generative AI Use in Reward Analytics and Decision-Making
The use of generative AI will catch up and instances of some aspects of reward analytics, reward communication, and reward decision-making will start to experiment with and use generative AI tools, starting with some basic labor-intensive activities.
- Total rewards statement formats.
- Drafting annual increment letters.
- Drafting a wireframe for key processes and decision-making steps for the merit increase cycle.
- Generating market benchmark data from the internet to validate primary data sources.
- Market prevalent benchmark for key decision-making points and pros and cons.
Continued Emphasis on Wellness
The increase in wellness initiatives in the past few years was only theoretically augmented by COVID-19, but delivering corporate wellness programs through remote mode was challenging for corporates and partners.
With back-to-office to almost pre covid levels, in many instances with even less flexibility than prevalent before COVID, the wellness initiatives can now fully come alive and instrumentalized.
Revival of Rewards and Recognition
As old-school levers of total rewards (compensation & benefits) lose sheen due to easy replicability between companies, the focus on innovative rewards and recognition programs may find glory again.
MICE (meetings, incentives, conferences, and exhibitions) are almost back in full swing already and rewards and recognition programs often coincide with annual days, offsites, and MICE events.
As in-person presence in office picks up pace, there cannot be any holding back on in-person group meetings, team lunches, leadership offsites, and recognition events. Most of these programs do overlap with or oversight from the total reward agenda of the organization.
Conventional Compensation Interventions
Cash remains the king. India is likely to see a comp increase budget slightly lower than 2023, but it still will be the highest in APAC and among all major economies.
The last two years saw wage inflation spiking in developed markets for the very first time, and while it probably will sustain a few more years till the dust to consumer inflation settles, India will continue to enjoy the highest wage growth in high single digits.
The talent crunch will only exacerbate, pushing up wages in line with the demand for high-quality talent in all sectors. Sectors such as GCC (or GIC) will continue to face immense churn as the deluge of global companies setting up their in-house captive centers in India will keep swelling.
Repercussions will be felt in related and associated talent pool suppliers like third-party BPO, KPO, other GICs, and people leaders in functions like payroll, HR service delivery, F&A (Finance & Accounting), process excellence, general managers, programs management, transition management will continue to be in demand – driving up wages at all levels including paraprofessionals, professionals, and managers.
Other sectors that will see heightened demand for professionals and an emergent fight for talent will be the entire ecosystem surrounding electric mobility, be it OEMs, battery manufacturers, technology, supply chain, and consulting partners that enable the design, implementation, adoption, and regulatory approvals.
Coming of Age of Gig Economy
It might be just the year that the gig economy finally becomes well entrenched and all companies do consider gig workers as an option for their short- or long-term talent supply needs.
It will naturally entail setting up workable systems and procedures for hiring, onboarding, and rewarding contingent workforce which could be fully remote or hybrid, and could be located cross border too.
Currently, gig workers do not enjoy traditional benefits like paid time off, and short- and long-term incentives. As competition for talent may permeate the gig economy too, companies may come up with innovative ideas to hire and retain a good quality gig workforce too.
Allowances & Perks
Innovative allowances and perks may come back in fashion as more and more companies call their employees back to work. The topics that were forgotten will come back to the fore – especially policies around transport, cafeteria, pantry, shift allowances, standby allowance, on-call allowance, daycare, etc.
During the lockdown and after that, these had all but lost their significance and relevance. They will see a revival and ebullience much more than pre-COVID times.
It will be an important year to test the resilience of many of the total reward programs and the variability of the values that employees attach to these.
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