It’s the start of a new year, and I am mentally preparing myself for the influx of Hot Jobs of 2024 articles predicting the most sought-after roles. They will likely point to increasing demand for AI prompt engineers and drone managers. I wouldn’t be surprised if robot liaisons become the next trend.
Predictions aside, many job titles of tomorrow will remain the same as today’s—and this is not indicative of stagnation; it’s an acknowledgment that the most crucial organizational functions will remain essential even as technology evolves.
In that spirit, I’d like to submit my own candidate for job of the future: the total rewards professional.
Now, you may be thinking that the term “total rewards” sounds like HR jargon, not exactly cutting-edge. Fair enough. If the traditional label isn’t to your liking, feel free to give it a modern twist. How about the titles: algorithmic rewards optimization engineer, cybernetic compensation planner or neurohacking rewards strategist?
‘Total rewards reign supreme’
Whatever you call them, total rewards professionals take a holistic approach to integrating all the things that add value to the employee experience (hence, “total”). The “rewards” for good work encompass a wide range of factors, including compensation, benefits, a sense of belonging, recognition, health, quality of life, purpose, relationships and much more.
This August, Arthur J. Gallagher & Co. released its 2023 U.S. Workforce Trends Report Series: Organizational Wellbeing, and said, “Total rewards reign supreme as employers prepare for growth.” Drawing on data from more than 4,000 organizations, it found that employee retention is now employers’ top operational priority, outranking even revenue and sales growth. Employers are investing strategically in rewards to achieve it. The organizations that win at total rewards win at business.
This isn’t about investing in one thing—it’s about supporting all the things employees need to thrive. The study revealed that organizations are making heavy investments in enhanced programs related to base pay (78%), variable pay (40%) and employee wellbeing (38%). Additionally, a sizable proportion of respondents named driving a positive workforce experience through cultural transformation (33%) and training and development (35%) as top priorities on their HR agendas.
In a surprising contrast, Paycor research revealed that while labor costs typically make up a whopping 70% or more of most companies’ operating budgets, most HR professionals invest a mere 15% of their time in managing these expenses.
For total rewards professionals, using this budget wisely is a top priority. That’s because those who work in total rewards bring a strong financial focus, exceptional analytical skills and an ability to balance financial constraints with competitive offerings. They are the unsung MVPs overseeing the single-largest expense companies have. Total rewards are truly an essential organizational capability.
But hold on a second—this isn’t exactly a new concept. Total rewards—or some variation of a portfolio that integrates pay, benefits, recognition, performance and more—has been a part of organizations’ HR functions for decades. So, what has shifted to put it at the forefront of today’s business landscape?
In the wake of the pandemic, the rise of remote work and the “Great Resignation,” the workplace has been turned upside down. The rules that dominated for more than a century no longer apply. In the new paradigm, people are the primary stakeholders. What they want keeps shifting amid so much change.
As a result, the strategies and offerings that worked to recruit and retain workers even three years ago are no longer valid. Employees move rapidly between a “show me the money” mindset and a broader list of priorities that include career and skill growth, flexible work options, parental leave benefits, diverse cultures and more.
The increasingly complex role of total rewards
At the same time, the rising consumer demand for customization and digitization in every aspect of our lives means there is no “one-size-fits-all” approach to compensation, benefits and rewards. As a result, the complexity of managing total rewards has significantly increased. Modern companies must rely on skilled professionals who can optimize offerings to meet workers’ evolving needs while responsibly managing their organization’s investments.
Also, a growing global focus on inclusion and pay equality has further driven demand for professionals with expertise in rewards and compensation. Most U.S. states have implemented pay equity laws, and several jurisdictions now require companies to disclose salary ranges in job postings. Colorado was the first to enact this requirement in 2019, followed by California, Connecticut, Illinois, Hawaii, Maryland, New York, Nevada, Rhode Island and Washington.
Research from Revelio, featured in the 4th Quarter 2023 issue of WorldatWork’s Workspan Magazine, reveals a 60% rise in the number of companies seeking compensation professionals since 2018. This surge in demand can be attributed to regulatory changes, the growing complexity of work and a highly competitive labor market.
Total rewards professionals bring both the expertise and the strategic mindset needed to navigate the intricacies of compensation and benefits, ensure compliance, and attract and retain top talent in today’s dynamic business landscape.
Organizations are deeply invested in the power of total rewards. While total rewards professionals may not grab as many headlines as augmented-reality journey builders or chief inspiration officers, I can tell you one thing: I can’t imagine a future without them.