Key Trends in HR
Part 2: Firms Reward Stars, and Benefits Expand

By Toni Vranjes

December 20, 2012

What trends have been shaping human resources in recent years, and what are the expectations for 2013? To provide insight, Revive My Career is running a three-part series covering key developments in HR.

  • Part 1 examines the sophisticated world of recruiting and hiring technology, which employers are using to increase efficiency and find the best candidates.
  • Part 2 focuses on compensation and benefits. Companies are rewarding top achievers and expanding benefit programs — but they’re also shifting accountability to employees.
  • Part 3 explores the growing appeal of flex time and telecommuting. As workers face conflicting demands from work and home, these flexible arrangements are expanding.

Employers Strive to Keep Top Talent

With the economy gradually improving, many employers have unfrozen their salary increase budgets, and they’re continuing to reward top performers, according to a report from the Society for Human Resource Management (SHRM).

Companies are very worried about retaining their best performers, according to a survey released in June by WorldatWork, Hay Group, and Loyola University Chicago professor Dow Scott. Several forces are at work, including U.S. demographic shifts and international trends. Baby Boomers are retiring, and employers in other countries are findings ways to hold onto their most talented people, notes Marcia Rhodes, a WorldatWork spokeswoman. Meanwhile, jobs are becoming more complex. For all these reasons, there’s fierce competition for strong performers.

HRTrends2The main reason that top employees jump ship is to earn more pay somewhere else, according to the 526 survey participants. And finding out that information is now much easier. People can compare their pay packages with those offered by other firms – thanks to sites like, and

In previous eras, company loyalty may have kept these employees at their companies, even if they knew they could get more money elsewhere. But today, with declining levels of job security, workers are less attached to their employers.

As the global talent war intensifies, what can businesses do to keep their stars? The researchers say that the most effective strategies are identifying crucial employees, discussing advancement opportunities with them, paying them above the labor market, and offering flexible-work arrangements.

The researchers also recommend that employers establish counter-offer policies, to compete with other companies that might try to lure their stars away. Businesses also should create succession plans.

New research shows that top achievers are being rewarded for their skills. According to a CNNMoney report this week, most U.S. workers will get a raise of about 3 percent, though some of the best performers can expect more — in some cases, even twice the rate of gain as the average worker.

Wellness Programs Expand

Health and wellness programs have been expanding beyond the traditional focus on physical health, according to Rhodes. They now include areas such as mental and emotional health, and financial well-being.

The goals are healthier, happier and more productive workers, and lower health-care costs for employers.

According to a WorldatWork survey released in February, 96 percent of employers surveyed provide health care, and 94 percent offer well-being programs. It also found that 77 percent plan to add even more well-being programs. The survey drew nearly 500 responses.

One major finding: 87 percent reported that the programs have a measurable positive effect on employee engagement. Also, 84 percent noticed a positive impact on employee satisfaction, and 76 percent reported a positive effect on productivity. In addition, 65 percent said the programs positively affected health-care costs.

However, fewer than one-third of employers offer these well-being programs to employees’ spouse or immediate family members. According to the researchers, opening up these programs to extended family would provide employees with more support and boost the chances for success.

As Programs Increase, So Does Accountability

As businesses expand their benefits programs, they’re increasing employee cost-sharing. Employers also are educating workers about how to access and use their benefits, and they’re shifting more responsibility to employees.

Most U.S. employers offer a high-deductible consumer-directed health plan, tied to a health savings account, according to the SHRM report. Firms also are providing information and tools to help employees make better health-care decisions. In addition, the most common type of retirement-savings program in the workplace is the defined contribution plan, which includes the 401(k).

According to a survey released in October 2011, which drew 462 responses, employers consider their workers to be more informed about their benefit programs. The WorldatWork survey found that 60 percent of respondents consider their employees to be educated about their benefits, up from 31 percent in 2006.

Also, 76 percent of respondents either have a deliberate strategy to make employees better consumers of benefit programs, or they’re considering such a strategy.

Meanwhile, more employers say they’re pleased with the outcomes. According to the WorldatWork survey, 38 percent have seen desired changes in employee behavior as a result of these efforts, up from 24 percent in 2006.

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