This year — once again — compensation and benefits professionals will need to focus on smart ways to stretch their limited payroll budgets. The competition for talent won’t go away, so optimizing workforce programs that attract, retain and engage talent will also be critical. To stay ahead of the game, organizations need to be keyed into these five trends as they navigate through 2016.

Segmentation and Differentiation

Managing and rewarding critical talent will be top priority to prevent talent outflow. Employee segmentation and pay differentiation will play key roles in those efforts. With limited salary budgets, organizations will no longer be able to dole out the one size fits all increases. Instead, they’ll need to invest money where they’ll get the most return — on high performers who have the skills and competencies the organization can’t afford to lose. That means having the courage to truly differentiate when it comes to salary increases and bonuses — and to create customized rewards packages that incentivize these employees to stay for the long-term.


Employees will continue to look for more flexibility in the workplace — from telecommuting to working unconventional hours — and they’ll seek employers that have policies to accommodate them. As this trend becomes more common, companies should consider implementing a flexible workforce policy, if they haven’t done so already, to attract new talent and bolster engagement levels in their current workforce.

Further out on the horizon: a movement towards more flexible pay. Some employers are considering offering flexible plans that allow employees to choose how their pay will be structured (e.g., more base, less bonus, or vice versa). Employers are also using conjoint analysis to understand which parts of compensation packages employees’ value most and adjusting pay plans based on their preferences.

Health and Wellness

Offering health and wellness programs that support a healthy workforce continues to be a trend for many organizations. These programs create differentiated employee value propositions and can be a key differentiator for employers looking to demonstrate their commitment to promoting and supporting health and wellness in the workplace. But companies need to better evaluate the effectiveness, sustainability and success of these programs. For example, if the goal is to provide tools that promote healthy habits such as making good food choices, getting regular exercise and managing stress, the first step should be to ensure that employees are motivated and inspired to participate in these programs. If they’re not, what needs to be modified to encourage participation to get the best return on investment? This could mean retooling the marketing efforts of these programs or making changes to aspects of the programs that need improvement.


Companies will need to continue to push for a culture that promotes openness and transparency when it comes to explaining pay and benefit philosophies to employees. Managers can play a key role in communicating these philosophies, but HR needs to ensure management teams have a firm grasp on the organization’s compensation and benefits programs and understand the “why” behind them, along with how to communicate to employees before pay and benefits discussions take place.

Analytics and Decision-Making

More than ever, data is king, and key stakeholders will look to HR to provide data-driven insights to identify and address workforce issues and provide solutions to help solve them.

About the Author

Towers Watson Media

Sambhav Rakyan

Towers Watson India

Sambhav Rakyan is the Data Services Practice Leader in Asia Pacific. To connect with Sam, email