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8 November 2016
What to do if …
You want to improve employee satisfaction with reward
without increasing cost
© 2016 Willis Towers Watson. All rights reserved.
Radha Chakraborty and Benjamin Viney
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 2
“How do I keep people
happy when my pay
increase budget
is only 2%?”
“Our HRIS system
shows how much we’re
spending on reward, but
not the value we’re
getting from it”
“Our millennials are
always complaining
our benefits are boring,
but we’re not Google
and they need to
accept that”
How are companies balancing reward spend, employee satisfaction and segmentation?
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 3
What should our
total reward spend be?
What is the best allocation of
reward spend to maximise
employee satisfaction?
How do the answers vary by
employee group
(e.g. high performers,
millenials, Executives etc)?
Employee views
(focus groups, survey,
conjoint questions)
Modelled Cost of
different reward elements
Optimum spend
Optimum Allocation
of spend
Clearer understanding of different
Employee groups preferences
+
=
-65
-60
-55
-50
-45
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
35
40
(£20,000) (£15,000) (£10,000) (£5,000) £0 £5,000 £10,000 £15,000 £20,000 £25,000
Current Satisfaction
and Spend
Cha
nge
in S
atisfa
ctio
n
All Rewards set to the
lowest perceived value
Change in Reward Cost (£000)
Base Pay:
Current
Diminishing ReturnsSweet
SpotCareer mtgs
with a coach
High Risk
Bonus:
current
Bonus:
+50%Pension:
double match
Holiday:
+5 days
Client example employee reward satisfaction and cost mapping
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 4
Case Study 1
5© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
What was the issue?
12,000 employees across
ten sites
Employee turnover at an
undesirable level (30%
p.a.)
Millions spent on
contractors as a result
What did they do?
Identified that the best way to
reduce unwanted turnover
involved work environment and
learning & development
improvements, not pay
Increased number of paid
training days
Increased re-imbursement of
tuition for work-related training
Significant investment in
leadership development
What were the outcomes?
Employee turnover decreased
from 33% to 21% (36%
improvement) in 3 years
Generated estimated savings of
£8 million per annum
Employee engagement scores
improved
6
If employees perceive
something’s valuable, it is.
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Case Study 2
7© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
What was the issue? What did they do? What were the outcomes?
Fast-growing high-tech
company
Mostly millennials; average
age 27
Company wanted to
ensure rewards were fit for
purpose
Competitors offering
company pension
contributions. Surely not
relevant here?
Conjoint analysis revealed that
company pension contributions
would be highly valued by
millennials
Management undertook focus
groups to discuss further with
employees
Employees confirmed they did
want a pension match
Increased perceived value of
rewards
Increased employee
engagement
8
Don’t assume anything.
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Case Study 3
9© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
What was the issue?
Major airline with 60,000
non-union employees
Intense pressure to reduce
costs
Needed to avoid potential
unionisation
Threat to profitability
What did they do?
Identified £400M benefit savings
from reduced pension
contributions and level of benefit
cover
Undertook focus groups after the
survey to explain changes to
employees
What were the outcomes?
£400M benefit savings over 4-5
years
0% forecasted change in
perceived employee value
Avoided unionisation activity
Employees thanked
management for the opportunity
for input into the change.
10
Gaining employee buy-in is
driven by the transparency and
logic of what is proposed.
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Lessons learned
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 11
Potential Challenges Our Experience
1. Won’t this build employee expectations unnecessarily? Getting the upfront communications right is very important.
2. Won’t this just tell us what we already know? Most projects tell companies things they previously didn’t
know.
3. What if we don’t like what the results are telling us? There are almost always significant opportunities to save
cost and increase employee satisfaction.
4. Will employees answer honestly? Won’t they just want
more of everything?
It is important to use a conjoint approach to surveying
employees
5. Our employees are ‘surveyed’ out “Employees have an insatiable appetite for answering
questions about their own reward.”
6. Isn’t it really complicated and time consuming? It is not complicated. The cost benefits greatly outweigh
the time and resources required.
7. What if we get a low response rate from employees? Senior stakeholder involvement, and an effective
communication strategy are key.
Some take-away questions
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 12
Are you measuring your reward ROI?
Do you really know what your employees
value?
Does your approach to reward cater for
changing demographic preferences?
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers W atson client use only. 13
Speaker details
Benjamin VineySenior Consultant, Rewards, Talent and Communication
Phone: +44 (0) 20 7170 2831
Radha ChakrabortyGB Market Leader, Data, Surveys and Technology
Phone: +44 (0) 20 7170 2322