Beruflich Dokumente
Kultur Dokumente
PLANNING
IN EUROPE
WEBCAST
OCTOBER 30, 2018
Luca Baroldi
European Rewards Practice Leader
Monika Todor
European Consumer Goods and Retail Industry Leader
© MERCER 2018 0
T O D AY ’ S S P E A K E R S
L U C A B AR O L D I MONIKA TODOR
European Consumer Goods and Retail
Workforce Rewards Leader Industry European Leader
luca.baroldi@mercer.com monika.todor@mercer.com
© MERCER 2018 1
AGENDA
1 G L O B AL TAL E N T T R E N D S
M A C R O T R E N D S I M PA C T I N G T H E
FUTURE OF WORK
2 2 0 1 9 C O M P E N S AT I O N F O R E C A S T S
FINDINGS FROM MERCER SURVEY
RESEARCH
3 HO W CO MPANI E S ARE
RESPONDING
REWARDS MARKET TRENDS AND
P R A C T I C E S T O W AT C H
4 AC T I O N S YO U C AN TAK E
S T R AT E G I C A R E A S Y O U C A N F O C U S O N
IN 2019 AS YOU BUILD FOR THE FUTURE
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GLOBAL TALENT
TRENDS
UNLOCKING GROWTH
IN THE HUMAN AGE
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P R E PA R I N G F O R T H E F U T U R E O F W O R K
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THESE CHANGES ARE RAISING CRITICAL
QUESTIONS
BUSINESS LEADERS
How can we build for an
unknown future?
HR
How can we attract and retain
tomorrow’s workforce?
EMPLOYEE
What does career success
mean in today’s world?
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MERCER 2018 STUDY FINDINGS
TOP 5 TRENDS
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CHANGE @ SPEED
NEED FOR MORE AGILE WORK PRACTICES
96%
1 Moving support functions to shared
services
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CHANGE @ SPEED
NEED FOR MORE AGILE WORK PRACTICES
96%
1 Moving support functions to shared
IMPLICATIONS
services
FOR REWARDS
2 Eliminating certain roles/ functions/
Focus on enhancing
departments
AGILITY in reward
OF systems
EXECUTIVES 3 Increasing regional control
ARE
PLANNING Building internal / external networked Assess effectiveness of
4 Rewards FUNCTION
STRUCTURAL communities
CHANGES
THIS YEAR 5 Flattening organizational structures
© MERCER 2018 8
WORKING WITH PURPOSE
C R I T I C A L T O T H E VA L U E P R O P O S I T I O N
KING WIT H PURPOSE
L I S T I C V I E W OF T HE VAL UE PR OPOS I T I ON
THRIVING ONLY
EMPLOYEES ARE
13
3x 13%
%
AFFINITY
MORE LIKELY TO PRIDE OF COMPANIES
WORK FOR A PURPOSE HAVE AN EVP
COMPANY WITH DIFFERENTIATED
A STRONG BY A PURPOSE
SENSE OF DRIVEN MISSION
PURPOSE
CULTURAL ALIGNMENT
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WORKING WITH PURPOSE
C R I T I C A L T O T H E VA L U E P R O P O S I T I O N
KING WIT H PURPOSE
L I S T I C V I E W OF T HE VAL UE PR OPOS I T I ON
THRIVING ONLY
EMPLOYEES ARE
13
3x 13%
%
AFFINITY
MORE LIKELY TO PRIDE OF COMPANIES
WORK FOR A PURPOSE HAVE AN EVP IMPLICATIONS
COMPANY WITH DIFFERENTIATED FOR REWARDS
A STRONG BY A PURPOSE
SENSE OF DRIVEN MISSION
PURPOSE Ensure PURPOSE
is cascaded through
CAREER & WELL-BEING employee value
proposition
CULTURAL ALIGNMENT
© MERCER 2018 10
PERMANENT FLEXIBILITY
THE EMPLOYEE EXPERIENCE
OF ALL EMPLOYEES
51% WANT MORE
FLEXIBILITY
BUT…
WORRY IT WILL
41% IMPACT PROMOTIONAL
PROSPECTS
© MERCER 2018 11
PERMANENT FLEXIBILITY
THE EMPLOYEE EXPERIENCE
OF ALL EMPLOYEES
51% WANT MORE
FLEXIBILITY
IMPLICATIONS
BUT… FOR REWARDS
Integrate FLEXIBILITY
HAVE HAD A REQUEST as a core part of value
36% FOR FLEX TIME
TURNED DOWN
proposition
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P L AT F O R M F O R TA L E N T
L E V E R A G I N G T H E TA L E N T E C O S Y S T E M
PARTNERSHIP 2 OF 5
TALENT ORGANIZATIONS ARE
© MERCER 2018 – USA DECK
PLANNING TO
FREELANCE
“BORROW” MORE
TALENT
TALENT IN THE NEXT
INTERNAL
TALENT 12 MONTHS
CROWD SOURCED
TALENT
CO-OPETITION
© MERCER 2018 13
P L AT F O R M F O R TA L E N T
L E V E R A G I N G T H E TA L E N T E C O S Y S T E M
PARTNERSHIP 2 OF 5
TALENT ORGANIZATIONS ARE
© MERCER 2018 – USA DECK
PLANNING TO IMPLICATIONS
FREELANCE
“BORROW” MORE FOR REWARDS
TALENT
TALENT IN THE NEXT
INTERNAL
TALENT 12 MONTHS Expand your EVP
CROWD SOURCED to appeal to
TALENT
NON-TRADITIONAL
talent models
CO-OPETITION
EXPERIMENT
with alternative reward
models to compete for
talent
© MERCER 2018 14
D I G I TA L F R O M T H E I N S I D E O U T
I M P O R TA N C E O F A D I G I TA L C U LT U R E
66%
OF EMPLOYEES SAY THAT
HAVING ACCESS TO STATE-OF-
THE-ART DIGITAL TOOLS IS
IMPORTANT TO THEM
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D I G I TA L F R O M T H E I N S I D E O U T
I M P O R TA N C E O F A D I G I TA L C U LT U R E
66%
OF EMPLOYEES SAY THAT
HAVING ACCESS TO STATE-OF-
THE-ART DIGITAL TOOLS IS IMPLICATIONS
IMPORTANT TO THEM FOR REWARDS
Deliver best-in-class
rewards experiences
through DIGITAL
PLATFORMS that
enable employees to take
quick action
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COMPENSATION
FORECASTS
INSIGHTS FROM
MERCER SURVEY
RESEARCH
© MERCER 2018 17
WORLD ECONOMIC OUTLOOK
2.9% 2,7% ▼
US
3.9% 3.5% ▼
ME 2.2% 4,4% ▲
5.8% 5.7% ▼
GDP
Unemployment
10,7% 10,8%
12%
9,2%
10% 8,9%
8,2%
7,7%
8%
6,3%
5,5%
6% 3,5% 2,4% 4,4% 4,5%
3,9% 4,0% 3,8% 4,1%
3,6% 3,7%
4%
2%
0%
Romania
Turkey
Sweden
China
Hungary
Denmark
France
Poland
Italy
India
Czech Republic
UK
Ukraine
Latvia
Germany
Netherlands
Portugal
United States
20%
15%
10%
5%
0%
PT ES IT DE FR NL DK PL CZ UA UK RO
General Market - Voluntary High-Tech Voluntary
25%
20%
15%
10%
5%
0%
PT IT ES DE FR NL PL CZ DK UK RO UA
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© MERCER
2018
2018 20
ANNUAL SALARY INCREASE PROCESS
SOME CHANGES BUT NOTING RADICAL…
*Source: Mercer Select Intelligence 2017 Rewards Decision-Making and Communications Survey
© MERCER
© MERCER
2018
2018 21
EUROPE SALARY INCREASES 201 8-2019
+2.0
Increased since 2018 No change since 2018
+0.5
12,0%
10,0%
2018 2019
8,0%
6,0%
+0.1 +0.2 +0.1 +0.1 +0.1 +0.2 +0.1
4,0%
2,0%
0,0%
TR UA HU PL DE NL IT ES FR RO CZ UK DK PT
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SALARY INCREASES
N O M I N A L V S . R E A L C U M U L AT I V E S A L A RY I N C R E A S E S
© MERCER 2018 23
I M PA C T O F M A R K E T C O N D I T I O N S O N PAY D E C I S I O N S
TURKEY ROMANIA
Increased inflation Changes in taxation
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EUROPE TRS SURVEYS OVERVIEW
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R E M U N E R AT I O N M I X
EXECUTIVE LEVEL
EXECUTIVES EXECUTIVES
WESTERN EUROPE EASTERN EUROPE
DE 61,0% 0,2% 23,1% 6,5% 9,2% RU 67,5% 0,4% 13,9% 7,3% 10,9%
© MERCER 2018 26
R E M U N E R AT I O N M I X
PROFESSIONALS
PROFESSIONALS PROFESSIONALS
WESTERN EUROPE EASTERN EUROPE
NL 80,9% 2,1%
3,8% 12,0% RU 81,0% 1,2% 7,8% 10,0%
© MERCER 2018 27
STI as a Percentage of STI as a Percentage of
Base Salary % Base Salary %
© MERCER 2018
10%
15%
25%
30%
20%
0%
5%
40%
30%
20%
10%
0%
19,1% 17,5%
DK
17,5% 16,7%
15,8% 15,0%
LV
Decreased since 2017
15,4% 14,0%
31,1% 30,0%
DE
44,1% 30,0%
22,6% 25,0%
UK
24,2% 25,0%
21,3% 25,0%
RU
25,0% 25,0%
20,4% 20,0%
FR
19,8% 20,0%
SHORT–TERM INCENTIVES
Target
Actual
18,1% 20,0%
No change since 2017
HU
19,3% 20,0%
22,6% 24,4%
IT
24,6% 25,0%
21,8% 20,0%
PL
23,4% 25,0%
20,2% 22,5%
Increased since 2017
NL
30,0% 25,0%
21,7% 20,0%
RO
22,9% 25,0%
TA R G E T A N D A C T U A L – E X E C U T I V E L E V E L
21,4% 20,0%
CZ
25,2% 22,0%
2018
2017
28
Source: 2017 & 2018 Mercer Total Remuneration Surveys
LONG-TERM INCENTIVES
P R E VA L E N C E 2 0 1 5 - 2 0 1 8
43% ( 0 %)
STOCK/SHARE OPTIONS
RESTRICTED SHARES/SHARE
56 ( + 1 1 %) UNITS
6% ( + 2 %)
PERFORM ANCE CASH UNITS
21% ( + 2 %)
LONG-TERM CASH
58%
© MERCER 2018 30
PERSONAS
EMPLOYEE SEGMENTS WITH UNIQUE NEEDS AND DESIRES
Sample Personas
LONG-TERM URBAN MANAGERI AL CONTINGENT
STARTERS STRIVERS
LOYALS AMBITIONS CORE WORKERS
© MERCER 2018
2017 31
THE POWER OF BENEFITS
I M PA C T O F B E N E F I T S O N E N G A G E M E N T
Employees who say: “my benefits meet my Impacts on how employee feels
needs” are twice as likely to agree to these about their employer – in priority order
statements
1 Salary
Career opportunities
"I am proud to work for my company"
Convenience of getting to work
Company culture
Thomsons Online Benefits: Expectations vs reality: the widening gap in global benefits
© MERCER 2017 32
HOW ARE
COMPANIES
RESPONDING?
2018 REWARDS
TRENDS
© MERCER 2018 33
H O W A R E C O M PA N I E S R E S P O N D I N G ?
2 0 1 8 R E WA R D S T R E N D S
W I T H S TA N D I N G I N N O VAT I N G I N P R E PA R I N G F O R
SCRUTINY R E WAR D S THE FUTURE
• Pay Equity & • Expanding Experiential • Focusing on the Rewards
Transparency Offerings Function
© MERCER 2018 34
PAY E Q U I T Y A N D T R A N S PA R E N C Y
S O C I A L & E N V I R O N M E N TA L P R E S S U R E S
DRIVING ADDITIONAL SCRUTINY
EUROPEAN
CEO PAY SHAREHOLDER GENDER PAY
RATIO RIGHTS REPORTING AND
DIRECTIVE BOARD/MANAGEM
ENT DIVERSITY
?
?
?
© MERCER 2018 35
I N N O VAT I N G I N R E WA R D S
E X PA N D I N G E X P E R I E N T I A L R E WA R D S
Organizations are modernizing their award programs and taking a “whole person” approach
to deliver meaningful experiences both INSIDE and OUTSIDE of work.
FINANCIAL
RECOGNITION
Helping employees solve
Rewarding employees with financial challenges, by
memorable, personal and providing support like short-
shareable experiences term loans and student loan
assistance or refinancing
CAREERS FAMILY
Addressing needs of
Digital career pathing
working parents and the
driven by AI
“sandwich” generation
© MERCER 2018 36
P R E PA R I N G F O R T H E F U T U R E
DISRUPTION IN THE ENVIRONMENT DRIVING
T R A N S F O R M AT I O N O F T H E R E WA R D S F U N C T I O N
I M P AC T T O R E W AR D S F U N C T I O N S
Demanding Changing Creating more Ensuring
AGILITY CAP ABILITY FLEXIBLE & GOVERNANCE
in reward systems needs from rewards PERSONALIZED in rewards decision
professionals reward solutions making
© MERCER 2018 37
ACTIONS YOU CAN
TAKE
AREAS OF FOCUS
FOR 2019
© MERCER 2018 38
A C T I O N S Y O U C A N TA K E
FOUR CRITICAL AREAS FOR FOCUS IN 2019
FOCUS ON THE FIX THE ANNUAL GIVE NEW LIFE BUILD FOR
FOUNDATION INCREASE TO YOUR EVP THE FUTURE
PROCESS
© MERCER 2018 39
F O C U S O N T H E F O U N D AT I O N
A PAT H T O E Q U I T Y A N D T R A N S PA R E N C Y
U N D E R S T AN D M E AS U R E AN D
JOBS AD D R E S S P AY E Q U I T Y
O R G AN I Z E J O B S
THROUGH ENHANCE PAY
J O B AR C H I T E C T U R E TRANSPARENCY
© MERCER 2018 40
FIX THE ANNUAL INCREASE PROCESS
B U D G E T S T R AT E G I C A L LY
© MERCER 2018 41
FIX THE ANNUAL INCREASE PROCESS
R E D E F I N E PAY F O R P E R F O R M A N C E
AN N U AL P AY P AY F O R
I N C R E AS E P E R F O R M AN C E
M AR K E T
C AR E E R G R O W T H
COMPETITIVENESS
P AY E Q U I T Y I N C E N T I V E P AY
RECOGNITION
© MERCER 2018 42
GIVE NEW LIFE TO YOUR EVP
T R A N S F O R M T H E R E WA R D S J O U R N E Y TO
DELIVER BETTER EXPERIENCES
© MERCER 2018 43
BUILD FOR THE FUTURE
R E D E S I G N R E WA R D S F U N C T I O N TO A L I G N W I T H
BUSINESS NEEDS
GOVERNANCE
How will we distribute decision making responsibility and manage risks through authority and accountability checks?
PROGRAMS
STRUCTURE PEOPLE TECHNOLOGY
& POLICY
SERVICE DELIVERY
What activities are done in the Rewards function, versus through technology, partnership with other functions, or automation?
© MERCER 2018 44
Q & A A N D C O N TA C T D E TA I L S
L U C A B AR O L D I MONIKA TODOR
European Consumer Goods and Retail Industry
Workforce Rewards Leader European Leader
luca.baroldi@mercer.com monika.todor@mercer.com
© MERCER 2018 45
APPENDIX
© MERCER 2018 46
SALARY INCREASES - 2018 ACTUAL
© MERCER 2018 47
SALARY INCREASES – 2019 FORECAST
© MERCER 2018 48
© MERCER 2018 49