Aon Plc · NYSE:AON
Aon — Total Rewards Survey Webinar (July 2012)
23 slides from Aon's conference presentation, Jul 12, 2012
Slide 1: 2012 Total Rewards Survey
2012 Total Rewards Survey The Path Forward: Transforming Potential Into Value Aon Hewitt Webinar Copyright © 2012 Aon Corporation To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Aon He
Slide 2: What Do We Mean by Total Rewards?
What Do We Mean by Total Rewards? Everything an employee gets and perceives as valuable or rewarding Experiential Environment Development Leadership & Culture Career Opportunities Work Environment Learning & Development Work Life Balance Goals & Coaching etc… etc… Company Personal Benefits Compensat
Slide 3: Why Conduct a Total Rewards Survey?
Why Conduct a Total Rewards Survey? Because, broadly speaking, it is failing to deliver… Global Engagement & Work Experience Total Rewards: Confused & Dissatisfied 1 our of every 2 employees disengaged More than half of employees do not know how their – 1 out of 8 actively disengaged pay is dete
Slide 4: Survey Responses from 749 Organizations
Survey Responses from 749 Organizations Industry Number of Employees Industry % Manufacturing 19.4% More than 25,000 Fewer than 1,000 Finance & Insurance 15.6% Healthcare 11.7% Other Services 7.5% Technology 6.6% 21% 17% Retail 6.3% Education 5.4% Professional, Scientific & Technical 5.4% Oil, Gas,
Slide 5: Input from 825 Respondents
Input from 825 Respondents Respondent Level Respondent Role 4% C-Suite Role % Professional EVP, SVP Human Resources 32% 17% or VP Benefits 27% 24% Compensation 22% Total Rewards 13% Manager 13% Executive Office 2% Finance 2% 41% Business Unit Leader 1% Learning & Development 1% Director Source: 2011
Slide 6: High Aspirations for Total Rewards…
High Aspirations for Total Rewards… Survey Total Rewards Priorities for 2012 Response Improve Employee Engagement 58% Improve Alignment with Business Objectives 52% Improve Ability to Retain Talent 48% Improve Ability to Attract Talent 44% Take a More Holistic View of Rewards 40% Reduce Benefits Cos
Slide 7: …But Mediocre Execution
…But Mediocre Execution SAY it is critical But actually DO 87% Align Total Rewards with Business Strategy 56% 86% Have a Total Rewards Strategy in Place 25% 75% Communicate Total Rewards Effectively 33% 50% Differentiate Total Rewards for Performance 18% 46% Gather Facts to Drive Total Reward Decisi
Slide 8: Different Approach at High Performing Companies?
Different Approach at High Performing Companies? Who are the High Performers? For this study, “high performing” or “The Best” organizations are defined as those that achieve the highest levels of: Revenue against objectives Innovation High employee engagement Using this definition, we found 15
Slide 9: 1. The Best Articulate Clearer/Different Goals
1. The Best Articulate Clearer/Different Goals The Best are almost 2X MORE LIKELY to have We have a clearly stated declared Total Rewards Total Rewards strategy an area of focus AND to Total Rewards a key area have a clearly stated of focus strategy % Targeting Above The Best are much Competitive Le
Slide 10: 2. The Best Balance More Inputs for Decisions
2. The Best Balance More Inputs for Decisions Critical Inputs to Total Rewards Strategy and Design Gather market data to assess competitiveness Alignment with business objectives Gather cost data Communicate effectively Gather analytics/facts to drive decisions Ensure compliance Gather input from HR
Slide 11: 3. The Best Connect More to Business/Employees
3. The Best Connect More to Business/Employees Programs Aligned with the Business Effectiveness of Total Rewards Communications (Number in parentheses indicates top 10 importance rank for all companies) Online website is effective Total Rewards communication Culture (5) vehicle Have flexible Total R
Slide 12: 4. The Best Define Effectiveness Differently
4. The Best Define Effectiveness Differently Use of Total Rewards Success Metrics Employee engagement Cost vs. budget Employee turnover Higher employee satisfaction with programs Modeling of Total Rewards spend against key business objectives Source: 2011 Aon Hewitt Engagement 2.0 Employee Survey 12
Slide 13: The Best Experience Better Results
5 .The Best Experience Better Results Employees understand the value of the Total Rewards Package Better Human Engagement trending UP in past 18 months Resource Outcomes Engagement trending DOWN in past 18 months Currently Effective in Achieving: Operational Efficiency Better M&A Objectives Business
Slide 14: Consequences Are Costly
Consequences Are Costly The survey results identified three major consequences for companies that do not manage total rewards effectively: 1. Missing valuable input from employees, which may lead to lower engagement and higher turnover 2. Missing opportunities to manage total rewards as a portfolio,
Slide 15: Consequence 1: Not Hearing Employee Voice
Consequence 1: Not Hearing Employee Voice Three of the top four total reward priorities for 2012 are – Improve engagement (58%), – Improve retention (48%) – Improve attraction (44%) These are all about improving the perception of total rewards in the eyes of employees and prospective employees.
Slide 16: Consequence 2: Sub-Optimizing the Portfolio
Consequence 2: Sub-Optimizing the Portfolio Increase Reward Effectiveness Point of Diminishing returns No Investment Change & Increased Effectiveness 3 2 Decreased Investment & No Effectiveness Change “Win/Win” ROI Decrease Zone Zone Increase Rewards 1 Rewards Investment Current Investment Investmen
Slide 17: Consequence 3: Taking Unnecessary Risks
Consequence 3: Taking Unnecessary Risks We do not We have We have a We regularly We have consider clearly process and monitor and mitigation this risk identified measures report strategies in as we this risk in place to on this risk place to manage assess this (e.g., to manage this rewards risk lead
Slide 18: Change is Desired
Change is Desired Companies Operating in 1 of 3 Modes Catching Up – Creating a strategy – Aligning leadership – Addressing structure and culture Moving Forward – Centralizing responsibility for reward strategy – Pushing for more tailored approaches – Increasing performance orientation and differ
Slide 19: The Way Forward is Clear
The Way Forward is Clear Barrier to Change (Top 3 Responses) The Best The Rest Little/No Awareness of Total Reward Objectives 32% 45% Leaders not Aligned 23% 34% Organization Structure 23% 27% Cultural Barriers 29% 33% Budget Constraints 71% 72% HR Structure, Governance and Decision Rights 15% 13% H
Slide 20: Time for Breakthrough Thinking
Time for Breakthrough Thinking High aspirations and mediocre execution are producing a lot of pressure for change. This is a time for breakthrough thinking that may require bold new ideas, including new ways of looking at the issues. To help our clients meet some of the challenges highlighted in thi
Slide 21: Getting Started: Pick a Point in the Process
Getting Started: Pick a Point in the Process To Improve Effectiveness, Manage Total Rewards as a Process The Best Apply Six Sigma Thinking Define clear outcomes and expectations for total rewards Gather multiple inputs to guide decision making Use facts to drive decisions and work to optimize
Slide 22: Your Questions
Your Questions 22 AION: Tewill
Slide 23: Thank you.
Thank you. For additional information, please contact aon.marketing@aon.com.