Five key trends in employee compensation for 2020
by Heat Recruitment
An attractive employee compensation package is essential to ensure you attract and retain the most talented people to your business.
Essentially, employee compensation is the total cost of an employee – that’s the sum of their annual salary and any additional benefits combined. Compensation packages can vary hugely between companies, but they tend to follow trends as sectors evolve and businesses compete with each other to attract and retain the best talent.
Compensation packages include base salary, bonuses and commission – plus paid leave, retirement plans and any other employee benefits. It can become a complex calculation – particularly if you’re not a full-time employee working regular hours. However, we tend to see similar trends across all roles – regardless of whether they’re temporary, permanent, part-time or full-time.
With this in mind, what should you expect to see more of in 2020?
In 2020, an estimated 35 per cent of the global workforce will be Millennials, with a majority of Generation Z just starting out in their careers. These two generations greatly value their employer’s honesty – and they’re eager to see open two-way communication about finances and expectations. Employees falling into this age bracket are generally keen to negotiate their compensation package.
Flexible benefits packages
Companies are now varying their employee compensation packages based on each individual, to ensure both parties get the best deal possible. As a result, employers can cut unnecessary costs and employees can select the benefits that best suit their needs. But as the popularity of this increases, businesses will be challenged to keep up with – or upstage – their competitors.
Salary increases for hard-to-fill roles
As the nationwide skills shortage continues, organisations are increasingly likely to increase their allocated budget for positions that are notoriously difficult to recruit for. But since an employee’s annual salary makes up a majority of their compensation package, employers must bear this in mind when tailoring a package to a new employee.
Mobile technology is on the rise
As both businesses and consumers become increasingly inter-connected, it’s becoming more common for staff to have their own laptops and smartphones for business use. In fact, 77 per cent of employees claim that they’re more productive when they’re working away from the office – something that likely wouldn’t be possible if the devices weren’t provided by the company.
Extravagant office spaces
While some companies are adding the odd benefit into the packages here and there, others aren’t taking their compensation packages quite so lightly. Goldman Sachs have invested £1billion into their new London HQ, which includes dedicated breastfeeding suites, a nursery, water play areas and high-tech classrooms to help support working parents. For those hoping to escape the busy office, there are therapy rooms for quiet contemplation, group prayer and even massages or acupuncture. This, combined with their gym, healthcare centre and roof garden not only helps employees to recharge, but fit their working life around their family life too.
Employee compensation packages are consistently changing and 2020 will be no exception to the rule.
Looking for the latest salary information to help you build a productive team? Check out the 2020 Heat Recruitment Salary Survey.