Compensation 

   
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Future-fit your total rewards with compensation plans that meet the needs of your workforce and your business.

Modernise compensation to secure talent aligned with your business goals

A well-designed compensation strategy is essential for both immediate and long-term organisational success. While compensation is often viewed as a significant expense, this perspective can hinder growth. Instead, employers should recognise compensation as a vital investment in their most valuable asset, their people, in today's competitive global talent market.

Modernising your compensation strategy involves a broader perspective than just cash and salary. Today's employees are looking for:

  • Compensation
    Includes base pay and incentives but pay alone isn't enough to attract and retain talent.
  • Benefits
    Health, retirement and other benefits play a growing role in reward packages tailored to individual employee needs.
  • Career Development
    Employees often value growth opportunities as much as, if not more than, pay and benefits, viewing career advancement as a key reward.

Expand knowledge beyond salary surveys

We suggest the following 10 tips for compensation professionals to expand their knowledge beyond salary surveys to inform effective compensation programmes:

  1. Understand the market: Regularly review compensation against industry benchmarks to stay competitive.
  2. Align with business goals: Ensure your compensation strategy supports overall business objectives.
  3. Communicate clearly: Transparently communicate compensation policies to enhance employee understanding and trust.
  4. Focus on total rewards: Include benefits, incentives and career development opportunities, not just base pay.
  5. Use data analytics: Leverage data to make informed compensation decisions and predict trends.
  6. Stay flexible: Adapt your compensation approach as market conditions and business needs evolve.
  7. Engage employees: Involve employees in discussions about compensation to increase satisfaction and retention.
  8. Promote equity: Ensure fair pay practices to foster a diverse and inclusive workplace.
  9. Legal compliance: Regularly review and update policies to comply with laws and regulations.
  10. Evaluate regularly: Continually assess the effectiveness of your compensation programmes and make adjustments as needed.

Four actions to move forward

  • Set budgets strategically
    Factor in both planned salary adjustment budgets as well as the increased prevalence of off-cycle adjustments when setting budgets. Ensure that pay adjustments are guided by appropriate governance vehicles to avoid cost overruns and pay equity issues.
  • Enhance pay communication
    In an era of increased pay transparency, not every organisation needs to be nor can be the highest payer in the market. When organisations are transparent about their philosophies and compensation expectations, employees are more committed and engaged.
  • Strengthen career mobility
    Despite fewer promotions planned as compared to recent years, enhanced transparency around how employees can grow their skills to grow their career and ultimately rewards can be highly retentive. That starts with a job architecture underpinned by a skills framework. 
  • Optimise total rewards
    Listen to employee needs and deliver on desired non-financial benefits, such as flexible working and well-being programmes, to contribute to a competitive total rewards package that attracts, retains and motivates your unique and critical talent pool.
Talent & transformation

2024/2025 Skills Snapshot Survey

Mercer's report underscores the advantages of adopting skills-based talent and reward practices and highlights how companies are making incremental progress in leveraging skills in talent strategy.
Download this report

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