Multiple Generations, Strategic Rewards and the Shifting Shape of Work

*This was first published in The Next Generation of Benefits*

When it comes to the workforce of tomorrow, the dominant discussion is about artificial intelligence (AI) and automation enabling jobs to be deconstructed into individual tasks as businesses move away from role structures to skill taxonomies. But there will always be “jobs to be done.” Optimizing for the new world of work requires understanding some basics: What tasks are repetitive, strategic, necessary year-round or project-based? How can jobs be more clearly defined to reflect team roles and still give employees freedom to contribute, motivated by purpose, and strategic rewards in a multigenerational workforce?

These are complex issues, but it’s important to begin with a clear sense of the shifting shape of work. It’s not just jobs that are changing; it’s also about who does them. For example, there has been more chatter than adoption when it comes to the so-called gig economy, but executives remain bullish on the concept. In fact, the Mercer Global Talent Trends 2019 report – surveying 7,300 respondents, including more than 800 c-suite executives, 1,600 human resources (HR) leaders, and 4,800 employees across 16 geographies and nine industry sectors – shows that 79% of executives (up from 26% in 2018) expect that contingent and freelance workers will substantially replace full-time employees in the coming years.

If anything, a “platform for talent” mind-set is increasingly prevalent. Experiments in how to intelligently match skill supply with work demand are underway across industries and, for some, extend beyond matching their own talent to job opportunities to include those in industry consortia. The use of contingent workers is rising, especially for transferable skills such as project management and user experience (UX) design. This enables employers to invest in and retain core workers who are engaged in higher value work and that related to intellectual capital.

Tech for Top Talent


To support this move, companies are creating a new lexicon for jobs and skill requirements to develop the building blocks for future roles. At the same time, employers are investing in technology platforms, internal gig marketplaces and contingent talent agencies to make it easier to find top talent – both inside and outside the company. With the potential for increased job displacement on the horizon, technology platforms that connect companies to former employees and future candidates can help tap into those who:

─       Have in-demand industry skills or know-how but have been displaced

─       Need to temporarily leave the workplace but still want to keep their skills up to date to ease reentry

─       Are nearing retirement and want project-based or part-time work.

Focusing on older workers has become more urgent because this population is acutely vulnerable to automation – Older workers tend to be concentrated in jobs where at least 50% of the tasks can be automated, according to a 2019 Mercer/Oliver Wyman report. With 75% of employees intending to keep working past the traditional retirement age, and five generations working side by side, it has never been more important for businesses and society to think creatively about how to leverage experienced workers.

Meanwhile, the emergence of new jobs calls for new skills, and the skills gap is a critical risk to successful redesign, restructure and redeployment. Especially when talent is scarce, people development becomes key to organizational competitiveness and sustainability. Thus, it’s not surprising that upskilling and reskilling have moved from ninth to third position on the executive agenda in the Global Talent Trends 2019 report – and have risen to the top spot for the insurance sector.

The median investment in reskilling is $1,000 per person, with companies in China and in the retail industry investing the most (median $2,000 for both). The focus is on employee-directed and hands-on learning as well as more formal reskilling programs for target populations. But to deliver what executives want, HR must shift its mind-set or risk a self-fulfilling prophecy: HR leaders say the main barrier to reskilling is the concern that reskilled talent will leave the firm.

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Strategic Rewards and Value Propositions

Redefining performance metrics and rewards is a critical part of aligning work to future value. Aligning executive compensation plans to transformation goals and long-term incentives can help to ensure a focus on future success, while innovation awards or modern recognition programs can incentivize change for nonexecutives. In fact, offering more diverse rewards and compensation is the No. 1 rewards priority among respondents to the Global Talent Trends 2019 report. To truly align the business, investments in rewards should reflect a company’s strategic focus, and this could mean a step away from market norms in pivotal areas. Leading companies are looking at how skill acquisition is being rewarded, quantifying what skills demand a premium and relooking at how their pay-for-performance philosophy sits with experimentation and learning. This year’s report saw transformation goals flood into executives’ metrics.

Attracting top talent and continuing to attract those employees after they are on board remain priorities this year.

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What has changed is employee perceptions about what makes a top employer. Job seekers care as much about the way the company conducts business as they do about the business it is in. Employees are active investors in the companies they choose to work with, so organizations must build a brand that affirms the soundness of that investment. Window-dressing perks and slick portals are not enough to engage tomorrow’s talent: more important is how the brand is infused into day-to-day practices and whether companies stand up from the values they put forth.

The 2019 report shows that two in five employees plan to leave their organization in the next 12 months, and 97% of C-suite executives predict an increase in competition for talent during the same period. Thus, the traditional mantra of “attract and retain” is being replaced with “attract and continually attract.” What appeals to potential employees can vary greatly, yet only one in four HR leaders today uses analytics to understand why people choose to join his or her company. Gathering insights into how an employer’s value proposition resonates with target groups can help shape messaging to candidates.

The value proposition is important in more than a candidate’s decision to join a company; it’s also about what makes people stay. There are clear differences across gender, generation and job level (Figures 1-3). Women value health benefits and flexible schedules more than men do. Those in managerial roles seek professional development and opportunities for meaningful work, while individual contributors value job security above all else. Compensation is less important for Generation Y but is also a key driver for Baby Boomers. To personalize their value propositions companies have begun using personas to identify what matters most to target populations and are using that information to improve their total rewards programs.

Nearly all workforce segments agree on the growing importance of adaptive work schedules. Fifty-four percent of employees said providing tools to manage their work/life balance is one of the top five things their company can do to help them thrive at work (compared with 40% in 2018 and 26% in 2017). This sentiment also is reflected in the fact that 82% of employees said they would be willing to consider working on a freelance basis. This figure is even higher in Mexico (94%), China (93%), Hong Kong (92%) and the Middle East (92%). Yet developing a strategy to attract and retain gig workers is near the bottom of the list of HR priorities for 2019.

A company’s total rewards philosophy is another area where brand values can shine through. Yet only one in three organizations believes its benefits strategy aligns with its overall people strategy, according to the Thomsons Online Benefits Global Employee Benefits Watch 2018/19 report. As new roles are created and existing roles change with automation and AI, it becomes more difficult to keep up with employee pay expectations and market values.

Companies have shown renewed interest this year in job evaluation and job design, which helps them to scientifically assess where roles fit within existing hierarchies. They are also drawing on a range of pay data – cloud, crowd and expert – to stay current. Perhaps because of this data, HR is more aligned with what employees are asking for this year (Figure 4) – Both HR and employees agree that offering a wider variety of incentives and differentiating rewards for high performers will make a difference.

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Companies are rethinking pay for performance in light of the need to become more transparent in light of the need to become more transparent and deliver on pay equity aspirations. Given the challenge of new skills and stagnating wage growth in many markets, one-third of HR leaders (and nearly half in the life sciences sector) are also innovating with rewards for high-demand skills. Leading firms are focusing on the overall pay experience and expanding the focus beyond base pay to include career growth, incentives and recognition.

A Curated Work Experience

With remote working and virtual teams increasingly becoming a reality, the quality of each employee’s experience depends, to a large extent, on being able to easily collaborate digitally. But the immediacy and volume of information afforded by technology can be overwhelming, and constant change only diminishes employees’ absorption capacities. Enabling the workforce to thrive requires a redesign of the work experience both to ensure that the right information and opportunities are visible at the right time and to foster employees’ sense of connection to each other and to their company.

Just as retailers personalize digital advertisements to engage customers, companies can make the day-to-day work experience more relevant for individual employees. By being more deliberate about what, when and how information is shared, companies can help employees manage choices about benefits, training, career paths and more. Making the work experience relevant to individual employees helps them grow and thrive.

Content curation- unifying all communications through all platforms – is an emerging role for many in the HR function. The move toward employee-led knowledge management systems will change the work experience. Leading practices include systems that hashtag individual experts in a knowledge domain, use employee recognition programs to rate individual contributions online, or ask self-rated experts to take on roles such as technical mentorships – providing an informal regulation of self-appointed subject matter experts. These systems are helping to curate knowledge and expert contacts that align with employee needs and interests.

For employees inundated by information and choices, simplicity is key. Thriving employees are nearly four times more likely to work for a company that understands their unique skills and interests and three times more likely to work for a company that enables quick decision making. Executives see the value too, ranking the need to simplify talent processes high on the list of the C-suite’s top talent investments.

Flexibility, Transparency

Helping people make choices is not just about giving them more options. This is especially true for flexible benefits, where too many irrelevant choices have led to little return. The same applies to self-service career management – Navigating the internal jungle gym of career paths for that next role can be daunting, making it easier to take a clearly defined job at another firm. Employees crave the advice a seasoned mentor might give but want it augmented with the data science insights available in the modern workplace.

A truly digital experience for employees refers to their ability to access work documents remotely, carry out HR tasks intuitively, or easily collaborate and innovate with colleagues. Thriving employees are almost three times more likely to say their organization provides the tools they need to do their job efficiently. And high-growth organizations are further along on the journey- They are twice as likely as moderate-growth firms to provide a fully digital experience for employees.

AI systems are automating curation based on known and learned information about workers, which helps to ensure relevance and impact for employees. To do this, companies need to have information about what is important to the individual, what similar people valued in the past and when priorities may shift (for example, after three years in a role or after having a child). Here is a perfect opportunity for technology to support managers, nudging them when certain conversations are relevant and offering suggestions to enrich the dialogue.

Using AI to help simplify and personalize the work experience is becoming more common. HR leaders are already deploying AI across a range of HR tasks – from hiring and onboarding to benefits selection and learning.

Ultimately, transparency is essential – Openness with employees about in-demand skills and how to personally connect to the future will be key to ensuring people know what is needed to stay ahead. Connectivity is just as essential when building brand resonance – how a company listens to its people, understands what helps them thrive and reflects shared values in its brand. Forging a relationship of trust with each prospective, current and past employee s will help build a lasting bond. Winning organizations will be those that become most human in their interactions – building trust, engaging in genuine and generous dialogue, and delivering purposeful experiences that delight and surprise their people. 

Ilya Bonic
by Ilya Bonic

President, Career, and Head of Strategy at Mercer

Kate Bravery
by Kate Bravery

Global Advisory Solutions & Insights Leader at Mercer