The Evolving Role of Total Rewards in 2024
2024 promises to be one fascinating year. People, companies and even nations only wish they could glimpse now what we will know at the end of 2024.
What will be the economic, supply chain and people impacts of the current dreadful regional conflicts? Who will be running the U.S., and how will this affect the social and macroeconomic environments? Which world economies will emerge from the remaining inflationary period stronger, and which will be weaker? These are only some of the obvious uncertainties. As for the unseen uncertainties, we hope to be prepared.
As members of the Institute for Corporate Productivity’s (i4cp) Total Rewards Leader Board know, our role can seem simple and straightforward; we are responsible for the foundational offerings that attract and retain talent and encourages them to show up for work every day. That said, the results of i4cp’s annual survey of the members of all our executive boards—published in the 2024 i4cp Priorities & Predictions report—show that even when life is simple, it can still be exciting.
Take generative AI (GenAI), the top people-centered priority for 2024 among our Total Rewards Leader Board members. Perhaps less than in some other disciplines, many Total Rewards leaders see the current generative AI offerings as less of a total rewards people-replacer and more as a service enhancer that can provide efficient and consistent answers to employee inquiries while providing new insights into the impacts of compensation and benefits programs on human behavior.
That said, even some of the highest-performance organizations must work hard to close the major gap between their current GenAI capabilities and that needed in the future.
Other 2024 priorities of total rewards leaders? Workforce development is a perennial contender. Wisely crafted total rewards offerings can amplify the impact of programs developed and led by other disciplines. Often, modest monetary incentives and even non-monetary recognition programs are terrific tools for adding depth and resonance to organizational initiatives. At the management level, our Total Rewards Leader Board members identified manager capability as a significant opportunity for improvement in 2024.
Similarly, total rewards leaders see a critical need for their organizations to bridge gaps in leadership effectiveness and management development. As a workforce evolves, experienced managers and leaders are continually being replaced by less-experienced successors. So, just breaking even requires continuous investment in training and development. Visionary organizations are never satisfied with simply maintaining the current level of maturity.
Of course, other key priorities from prior years remain unchanged—total rewards offerings must be continually evaluated and realigned as needed to reflect changes in market practice and competitiveness. Corporate inertia and cost considerations are two key factors that can lead to competitiveness gaps. If not identified and addressed in a timely manner, these gaps can expand, making it even more difficult to address emerging and evolving challenges.
Companies continue to face internal hurdles with adapting to hybrid work arrangements and return-to-office initiatives (or mandates). i4cp’s extensive collection of research offers insights into how next practice organizations (those implementing practices that our analysis shows have correlation to enhanced performance, but that are not yet widely adopted) are out in front successfully navigating the myriad of issues that spring up as work changes.
For example, i4cp’s recent report, The Productivity Predicament, provides an objective and analytical look at organizational trust and how high-performance organizations have differentiated themselves to achieve productivity improvements despite the many negative headwinds facing all companies
Total rewards leaders must continually work to collaborate with their peers in all HR disciplines as well as in the broader business, ensuring that compensation, benefits, and ancillary employee offerings harmonize with and magnify the benefits of corporate initiatives and imperatives.