what to do if you want to improve employee satisfaction with reward without increasing cost

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?


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


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


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.


Case Study 3


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.


Lessons learned


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


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

[email protected]

Radha ChakrabortyGB Market Leader, Data, Surveys and Technology

Phone: +44 (0) 20 7170 2322

[email protected]

what to do if you want to improve employee satisfaction with reward without increasing cost

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