We live in an experience economy and we have examples in our environment where we are willing to pay extra just for the experience, which makes us feel valued and important.
How Sunita Matkar was hired
Monday 10:00 HRS, HR Division, HireDifferent India.
Sunita Matkar is all confidence as she steps into the room for her final round of HR interview. Her stellar academic career has been eminently aided by the many loans the banks have invested in her. She isn’t worried though. Every company that has interviewed her wants her.
Sunita isn’t sure how a small company like HireDifferent is going to match what’s already hers for the picking. But she is curious. She smiles as she reciprocates the handshake from the HR Director. So far, there isn’t anything very different, she thinks in her head.
Director, HR: Hi Sunita, take your seat. It has been a pleasure going through your resume. It talks about a very spirited person with great ambition.
Sunita: That is most flattering, thank you, sir.
Director, HR: No, you most deserve your laurels. And going by what you previously told us, there are many companies that have been as flattering.
Sunita: Thank you, sir. It has been quite a struggle to get to where I am.
Director, HR: Absolutely. And at this company, we appreciate such tenacity very well. Our team of experts went through your requirements to come up with an offer letter that I am now going to discuss with you.
We see that you already have an account with our preferred bank. They have agreed to reduce the interest rate on your loan by 2%. At their current rate, and allocating 30% of the salary we are about to offer you towards the loan, you should be able to clear your liabilities in under three years.
To further your academic credentials, a sum of 1 Lakh rupees is available at your disposal for certifications that fall within your line of interest. And this is over and above your total compensation.
The best caterers in this city have been shortlisted to sell in our cafeteria. As a special case, the company will be reimbursing your meals for the next three years. Details are in your letter.
To ensure that your safety in this city is not compromised, you can use our third-party agency to select an apartment that is most conducive to your stay. And every time you work beyond regular hours, a cab will be available at your disposal. All this comes at no extra cost. If you choose to opt for a shared accommodation, our Gang-Of-Girls team at HR will be more than willing to assist you.
Ms. Matkar, I have only covered benefits that are exclusive to your requirements. We have much more going on in your offer letter. I will allow you for the time that you deem sufficient to get back with your answer for us. Have a great day!
Monday 18:00 HRS, Coffee Day
Sunita’s friend Priyanka is exasperated. “Are you serious?” “You turned down an offer with Revensys for a startup. What were you thinking?”
“You know me very well, Priyanka”, Sunita smiles confidently. If I had not dared to be different, I wouldn’t have been where I am.
What do employees really want?
Different things actually, based on their age, marital status, gender, and ethnicity. But the one thing that every employee desire is to feel wanted and to be special. Much before an organization designs its Total Rewards, two important points every organization must need to pay attention to are as follows –
- Creating Employee Experience
- Cash is always King
Employee experience is the big differentiator in overall employee lifecycle. Employees relate to the organization emotionally and if every experience in the employee lifecycle touches the emotions positively, it makes the bond stronger between employee and employer. We live in an experience economy and we have examples in our environment where we are willing to pay extra just for the experience, which makes us feel valued and important. Organizations must need to ensure that it has systems and processes which are supporting employee experiences at every stage starting from the selection process till separation process.
Beyond the employee experience, Cash is the most dominant component of the Total Rewards.
Since the needs of the individuals are different, offering a preferential based Total Rewards, based on gender, age, and other demographic factors become very important. One size does not fit all.
In order to understand the need for having a preferential based Total Rewards in IT Industry, I reached out to over 200 IT professionals from close to 70 IT firms across India. Emphasis was given to reach out to all levels of the organization starting from Junior Professionals to Top Management. 75 respondents finally participated in the study.
1. Among the components of Total Rewards, Cash (Base Pay) topped the list followed by Working Environment and Learning Opportunities. This clearly indicated that Employees are looking for cash component as the most preferred reward mechanism.
2. Participants were asked to rank their preferences across 10 subcategories of Total Rewards on a scale of 1 to 10 with 1 being the most preferred option and 10 being the least preferred. Here, base salary/fixed salary continues to remain the most preferred option followed by work-life balance. Variable Compensation and Transport Allowance are the least preferred options.
3. Gender-Based Preferential Results: Under most preferred rewards, there has been a consistency observed across genders but in the case of female respondents, Health and Wellness benefits trumped Learning and Development. For men, Learning and Development were among the top 4 priorities. Some other observations from gender-based preferential rewards are as follows –
- Female respondents preferred work-life balance to base compensation. For men, work-life balance comes a very distant second to base compensation.
- Male respondents preferred learning and development opportunities over wellness benefits while for female respondents; it was the other way round.
- It was also observed that 65% of the Male participants and 62% of the female participants supported the concept of preferential-based total rewards.
4. Age groups based Preferential Results: Based on the respondent’s demographic details, there were five age groups under which analysis was carried out. Findings of the same are captured below –
- Respondents with <25 Years of age group: Base compensation tops the list at 60%. Career Opportunities and Learning and Development follow in order at 20% each.
- The 25.1 to 30 Years of age group: Base salary, Career opportunities, learning, and development are in the top three like the previous group. No major changes here except that Health and Wellness benefits are viewed more favorably (11% as compared to 0% in the previous group).
- The 30.1 to 35 Years age group: Work-Life Balance not only trumps Base Salary, it outperforms Career opportunities and Learning. This could probably be attributed to employees entering into the post-marriage phase of their lives.
- The 35.1 to 40 years of age group: While the preferred options remain the same as in the previous category, the key difference here is that the difference between Base salary and Work-Life Balance is just 5%. It indicates the relative importance of work-life balance priorities for this age group. The age group looks forward to enhanced career and learning opportunities as well.
- The 40+ age group: Like their youngest peers, participants with over 40 years of age are very clear on their priorities. 60% of the participants prefer base salary whereas the remaining 40% prefer work-life balance. None of the other benefits compete well with these two priorities.
While the research was carried out to draw comparisons among various other demographic variables as well, it was found that Total Rewards can best be offered as “Preferential Benefit” if mapped with Age Group as primary classification.
Based on this analysis, it is concluded that Total Rewards could be offered based on a segmented population. While cherry-picking just one analyzed option is not desirable, linking all categories of total rewards can get very complicated.
Segmented based Total Rewards are a strategic decision for any IT organization. While this concept has not been fully achieved in reality. With the changing nature of the IT demographics in India, HR companies will have to seriously consider their approach towards total rewards if they are to effectively hire and retain the best employees at their disposal.
News Originally Posted on: PEOPLEMATTERS