The role of total rewards leaders has evolved massively over the past several years. And the changes are showing no signs of slowing down — making it imperative that total rewards leaders keep up to stay ahead.
“You need to keep up with the pace of change,” said Jamie Newton, managing director and founder of Total Rewards Search Inc., a New York City-based staffing and recruiting firm. “No one is going to tell you to do this. You need to do it on your own.”
Over the past decade, Newton explained, the role of total rewards leaders has evolved to encompass responsibilities such as working with compensation committees, partnering with investor relations, and meeting and working with top executives including the CEO and chief financial officer. The role also has evolved to require being more proactive on attraction and retention and working closely with the chief people officer on those efforts.
Looking ahead to the next decade, expect more significant changes regarding the profession, Newton said — think more technology, more personalization in benefits and pay, and even a potential switch in the name of the profession.
More Customization
For instance, Newton predicted that the demographic of the future workforce will demand transparency and customization in pay and benefits strategies, similar to the customization employees use and expect in apps such as Netflix and Spotify.
“We’re all working in multi-generational employment demographics,” Newton said. Notably, with younger employees, “they want choice, they want agency. They want a sense of customizing things to their needs. Why should that expectation not transfer to things like pay?”
He noted that employees might insist on on-demand pay and may want to customize their pay based on their needs — for instance, some employees may prefer a higher base salary with less emphasis on bonuses, while others might opt for a lower base salary with the potential for higher performance-based incentives. Employees could also choose to receive cash or stock options and could also allocate their benefits dollars to what suits them and their families most.
Total rewards leaders will also want to consider testing alternative compensation structures and skill-based pay models within their organization, Newton said, noting that employees might be expected to be paid more for exhibiting certain skills, rather than their education and experience. He also predicted that sustainability and environmental, social, and governance metrics will become more integrated into executive pay.
More Technology
Total rewards leaders will have to be proficient in artificial intelligence and other emerging technologies such as machine learning and data analytics, Newton said. Technology will likely help total rewards leaders to better forecast compensation expenditure based on historical trends such as attrition rates. “We might be able to predict salary trends, attrition trends, any kind of other economic factors, and actually be able to forecast talent needs years ahead of time,” he said.
AI could also help total rewards leaders to analyze employee demographics, career stage, and preferences to suggest tailored compensation and benefits options for their employees.
Chief Reward Officer?
Newton also predicted that the role of the total rewards leader will evolve into that of a chief reward officer, given all the new responsibilities they will have.
“Some of these you do intrinsically already, but that expectation will shift — and it already has shifted — where you’re going to have to wear these multiple hats,” he said. “So, the role is shifting to AI-driven, data-informed, and experience-focused leadership. That job will be called the chief reward officer. I think it’s only a matter of time. I think it’ll become incredibly commonplace in the next five to 10 years.”
Significantly, he said, he doesn’t necessarily think that the job will be a traditional HR position but instead will work alongside HR and will work with the CEO as a peer. “That is where we’re going in terms of the chief reward officer,” Newton said.
Readying for the Future
Besides keeping up-to-date with technical skills — learning how to best use technologies, for instance — Newton said total rewards leaders must not forget soft skills. Focusing on how to better communicate, speak, and present; being authoritative; and being more confident will be vital in the coming years, he said.
“You need to learn to have presence, learn to master communication. It’s about how you present yourself, how you exude confidence,” he said, adding that organizations or tools such as Toastmasters International or Coursera can help.
“Think about the amount of time you have when you present something to an executive,” he said. “You may have a two-minute window to explain something very complicated, and you have to hold their attention, avoid using jargon. Where do you get that skill?”
In short, he said, total rewards leaders need to expect changes to proliferate in the workplace and their profession — but realize that they can change with it.
“We need to be resilient, and we need to adapt to do it,” he said.
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