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Thursday, 21 November 2019 08:40

What are the top trends for 2020 when it comes to Remuneration, Rewards and HR?

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What are the top trends for 2020 when it comes to Remuneration, Rewards and HR?

REMUNERATION, REWARDS AND HR TRENDS – TOP TRENDS FOR 2020
from SA’s largest Remuneration and Reward Consultancy  

“Appreciation is a wonderful thing. It makes what is excellent in others belong to us as well.” — Voltaire

It’s always important to remember that loyalty has never come from “cracking a whip”. French philosopher and writer Voltaire’s words ring very true, despite the fact that he penned them over 200 years ago.

Happier people are simply less distracted and more positive. And they pass that on through referred positive actions. So, the more value you bring to your employees’ lives, the more they’ll bring to your company. And employees should never feel like they are the “Have Nots” if they see company leadership as the “Haves”.  Rewarding your staff members can do wonders for morale and for your turnover. And employee rewards and remuneration schemes do get results. 2019 has seen a few shifts in remuneration, rewards and human resources trends. With 2020 just around the corner, here are a few top tips for the coming year.

Top Trend 1: Where corporate governance is headed 

Trust and transparency have become extremely important as society in general becomes more accustomed to free access to information. And there has been a particularly strong focus in recent years on what directors are earning, with single figure reporting for top management openly exposing the top earners’ total pay within organisations. 

Principle 14 of the King IV Governance report makes it extremely clear that ethics and fairness are paramount when votes are cast by governing bodies, stating: “The governing body should ensure that the organisation remunerates fairly, responsibly and transparently, so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.” 

Non-binding “No” votes on remuneration policy are on the rise, as stakeholder scrutiny and awareness increases. And there is a possible move towards binding votes on the cards for the King V report. Fair and transparent pay policies are becoming a necessity for compliance with the SOE guidelines for each sector. And there is a stronger focus on aligning variable pay to company performance at director level.  

Environmental, Social and Corporate Governance (ESG) performance measures are becoming a key component in addressing all stakeholders’ (not only shareholders’) concerns. And the introduction of malus penalties and clawbacks for badly performing, or unfairly paid, executives are becoming more the rule than the exception. 

Top Trend 2: Arresting the wage gap 

Reducing the ratio between CEO pay and the general worker’s pay is being helped along by transparency measures and the introduction of EEA4 reporting to the Department of Labour, which implemented the system specifically to address salary parities.  It’s likely that we’ll see companies introducing caps on variable pay in the coming year to stay on top of it all.  

Top Trend 3: Greater focus on gender pay parity – and it’s the law 

Under the Equal Pay for Work of Equal Value legislation and the ANC National imperative around gender, the male/female pay gap will soon become a thing of the past. Equal opportunity for both sexes is something that all companies or organisations will need to be mindful of to stay compliant.  

Top Trend 4: Minimum shareholding requirements at director level 

Executives will be expected to maintain in-employment and post-employment investment. This means that organisations will require that executives hold a multiple of their Total Package values in shares that have no other restrictions, i.e. they have a fully vested interest in the company. 

Top Trend 5: Talent engagement and rewards 

The “Total Reward” concept is being adopted by more organisations every year. This is the idea is that companies need to focus on rewarding employees in the broader sense, by adding value to their lives beyond just remuneration.  These are just some of the staffing trends we’re likely to see more of next year: 

  • Increased mobile working
  • Increased flexitime
  • Rewards for proactive entrepreneurial and innovative value-add ideas
  • A shift in performance management from measuring activities to outputs
  • Provident /pension fund equalisation between execs and general staff – all employees should be able to contribute the same maximum to their provident/pension funds
  • Investment in and closer focus on organisation culture
  • A greater tolerance and understanding of employees’ needs and “Create my pay my way” remuneration, for example, more leave days, study time, self-development time and holidays  

Top Trend 6: Change and business transformation management 

Technology should never be an inconvenience. It should be adding value to your business as it evolves. And organisations are also recognising that the ever-evolving workforce needs to be respected and managed with sensitivity to stay ahead. Modern change management capability next year should be focused on four key factors:  

  • The changing dynamics of the work force, especially inter-generational dynamics
  • The changing nature of data (and BIG DATA’s massive influence on decision making)
  • IOT (Internet of Things) is changing the nature of work
  • Artificial intelligence (AI) is directly affecting resource planning and restructuring for changes and job losses in certain industries 

Top Trend 7: Agile Organisation Structuring 

If you don’t move with the times, it’s likely that they will completely pass you by.  

Traditional functional corporate structure designs are fading away in favour of more agile, quick-turnaround, team-based decision matrix structures. South Africa is particularly affected by the change in thinking because of globalisation. Both government and private companies are changing.  

Here are the trends we’ll see more of in 2020: 

  • Business processes are becoming more streamlined – to cater for faster market delivery and more demanding and informed clients/voters.
  • Organisations are becoming viewed less as “machines” and more as sentient “organisms”.
  • Union membership is declining, which is a natural consequence of easy access to information among ordinary employees who can engage directly with much more ease.
  • These circumstances have generated an entirely new level of complexity in designing jobs, job profiles remuneration packages.
  • Skills audits are on the rise, as organisations work towards achieving the right ratio between superior performance and their wage bill. Audits also ensure that organisations are optimally staffed to deliver on their strategies.
  • There is an increased focus on team-based pay or “as organism” structure.    

Contact us to help you get your remuneration, rewards and human resources policies up to scratch for the ever-changing world, because as author Mary Lydon Simonsen said, “‎Determination, effort, and practice are rewarded with success”. 

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About 21st Century
21st Century is a specialist Remuneration, Organisation Development and Change Management consultancy, with over 1700 clients nationally and internationally. Our 60 in-house specialists are committed to staying future-focused and in the know about industry trends. 21st Century has proudly maintained a B-BBEE level 2 rating since 2015. Our sustainable Remuneration solutions are based on an audited salary survey database and established web-based Remuneration Systems and Remuneration training courses.

Issued By:The Lime Envelope
On Behalf Of:21st Century
For Media Information: Bronwyn Levy
Telephone:011 467 9233
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