March 25, 2016
With a lack of career development opportunities being the number one reason why employees leave organizations; employers are increasingly recognizing alternative rewards as an essential component of a competitive total employee rewards strategy. In fact, companies prioritise career development more than other alternative rewards, benefits and bonuses, according to new research by the Hay Group division of Korn Ferry (KFY). Nine in ten organizations (90 percent) surveyed employ four or more alternative methods of rewarding employees (including career development programmes, health and welfare benefits, additional paid time off and other benefits) as part of their HR strategy. More than 8 out of ten organizations surveyed said that alternative rewards are key to being an employer of choice (89 percent), remaining competitive (87 percent) and engaging employees (81 percent). Eighty-seven percent of respondents also agreed that alternative rewards are an important tool in retaining the organization’s existing talent.
Over the next year, the vast majority of organizations (71 percent) plan to increase their use of alternative rewards. More than two-thirds of respondents (69 percent) plan to expand their use of alternative rewards at the manager/professional level and below, while the rate is slightly lower for executives, at 53 percent.
Across all employee levels, career development programs are poised to see the biggest expansion in use during 2016. More than half of respondents indicate they intend to expand the use of career development programs across all employee levels, supporting the creation of a stronger bench of employees with the hard and soft skills needed to assume more challenging roles within organizations.
“These findings underscore what we are seeing with our clients and their focus on putting together career development frameworks across the entire organization – from the staff support ranks up to executive levels,” said Tom McMullen, rewards practice leader at Hay Group.
“Even within the upper echelons, career—and leadership—development opportunities are critical to developing the competencies that can help elevate employees to the C-suite or prepare them to take on new functional roles.”
Hay Group’s global employee opinion database reveals that a lack of career development opportunities is the number one reason why employees leave organizations. The Alternative Employee Rewards survey findings indicate leaders are elevating and addressing this issue within their organizations and building career development into their broader total rewards strategies.