Navigating economic uncertainty: Innovative rewards strategies for the high-tech industry 

In today’s volatile economic landscape, high-tech companies are grappling with unprecedented challenges that threaten their financial stability and growth. According to a recent survey by Deloitte, 70% of tech executives are concerned about the impact of economic uncertainty on their business operations, with many citing the need for immediate cost containment strategies as a top priority. Ahhs organizations strive to maintain competitiveness while managing expenses, it is crucial to adopt innovative rewards cost containment strategies that not only address immediate financial pressures but also foster long-term employee engagement and retention.

To effectively navigate these turbulent times, companies must rethink their approach to employee rewards and benefits. Small changes that “nip around the edges” may not be significant enough to address the current set of challenges and uncertainty.

Here are three recommendations for high-tech organizations that need to achieve cost savings while maintaining a motivated workforce:

Maximize ROI with data driven insights

In times of economic uncertainty, many organizations will turn to their Total Rewards spend in an effort to find cost savings – this is especially the case in high-tech, which is known for offering a variety of generous and innovative perks and benefits to attract top talent. The risk is that by cutting cost (and benefits) you also erode your value proposition, which can have a lasting impact on your employer brand. However, many high-tech companies are sitting on a gold mine of data they can use to take a targeted approach. Existing employee survey/preference data, benefits cost/ utilization statistics, and employee demographics and personas can be combined with external research and competitive intelligence to provide a detailed “optimization map.” This can help leadership teams take targeted actions – reducing spend on parts of the total rewards offering that have the lowest ROI. This also preserves those that employees care about most and provides differentiation in the market.

Consider creative strategies that maintain agility

In times of significant disruption and uncertainty, some organizations will need to take more dramatic actions to reduce their compensation expense. Many of those will focus on headcount reductions to reduce overall salary expense, but a more creative approach can drive better results.

Some alternatives could include:

• Converting cash bonuses into equity with a multi-year deferral to reduce current-year expense while maintaining employee value.
• Shifting some employees to a reduced work week or job-sharing.
• Temporary leaves of absence, potentially with a stipend to maintain employment-status and benefits eligibility.

These strategies could be enough to help an organization through a period of volatility, while also keeping key talent within the organization for when conditions improve.

Accelerate the transformation of work (and your workforce)

The world of work is going through an unprecedented period of disruption, as advances in AI and automation are transforming the way that work gets done. Leading organizations are redesigning jobs to leverage technology, driving significant improvements in productivity and reduced costs. This presents a golden opportunity to reconsider:

• Which roles provide the greatest opportunity for redesign?
• What skills will be needed from your employees going forward?
• Where should those employees be located?

By accelerating the transformation of work and thinking holistically about total employment cost within the context of broader workforce planning issues (such as the availability of emerging skills in different locations), companies can make transformational changes that will position them for long-term success.

As the high-tech industry faces economic uncertainty, adopting innovative rewards strategies is essential for managing costs, retaining critical talent, enhancing agility and positioning the business for long term success.

Watch our webinar replay to learn more about cost optimization and employee wellbeing strategies.