Reward transformation doesn’t just have the potential to help reshape a business holistically; it can also help it to grow financially by helping to define a unique strategic focus. For an employee, it quantifies the value they add to the organisation in the rewards they receive.
I believe large companies may find it difficult to implement reward transformation because they are too focused on the here and now. Sometimes it’s too easy for HR to say “no, it’s too difficult” even if Finance has approved it. We can often get bogged down with the transactional part of a project’s deployment, rather than the overall purpose.
As we all know, collecting employee data can be time consuming and costly. The respective AE and RTI initiatives are going to create a lot of data with much information duplicated. This is why it makes sense to streamline both and, having gone through that pain, look at the overall reward and benefits package - with the benefit of knowing that have a clean starting point.
A reward transformation scheme isn’t just realised by the Reward team within HR. It needs buy-in from the organisation’s executive team: commercial, finance and supply chain management, with participation from the wider HR team and employees via their personal representatives and unions.
Although this may seem like a logistical nightmare, you will be actively sharing information and building a new network of expertise from the teams around you, therefore reducing the replication of time and effort across all functions and locations. It gives an opportunity to demonstrate that the provision of integrated data to the business can be part of what HR does.
There is no disputing that making these changes will be difficult; integrating with existing systems and budget restrictions is always disruptive and complex, especially for large companies. However, those who can get past these barriers should find that reward transformation will have a positive impact on the bottom line. Take a salary sacrifice scheme as an example.
It doesn’t just help a business to potentially save money by being more tax efficient, it can also add value to their attraction and retention strategies. In that regard, reward transformation provides the ability to look at ways of enhancing engagement, as it allows companies to structure remuneration packages to the benefit of the individual and the organisation.
This can reduce absence, improve commitment and incentivise the workforce to deliver more on a day-to-day basis. I would go as far as saying that reward transformation activity could significantly improve market share and top line revenues; such is the scope of the improvements that it can drive.
Having lived through various HR initiatives that lose momentum or fade away when other priorities come along, I believe that reward transformation schemes are here to stay and will redefine how we look at the overall reward offering on an ongoing basis.
The real winners will be the companies who are attuned to their employees’ needs and whose individual teams start interacting with their neighbours. Reward transformation should lead to a saving rather than a cost and, if done properly, will not disrupt anyone’s day to day job.
Ingrid Waterfield is Reward Senior Manager at KPMG in the UK