Using total rewards to engage healthcare’s multigenerational workforce

Total Rewards for a Multigenerational

WorkforceHow Can Healthcare Maintain a

Competitive Edge

Guest Presenter: Mary Mosqueda Practice Leader | Lockton Companies

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Mary Mosqueda


Mary Mosqueda is the Practice Leader for Lockton Companies Compensation Global Consulting Practice and is an in-demand national speaker on total rewards and compensation. With over two decades of experience in compensation, human resources, and work/life programs, she has been a key contributor in the strategic development of public and private sector executive compensation and total rewards programs that attract and retain top talent.

She assists clients with strategy, design, funding, administration, and communication of total rewards programs and incentive compensation plans—including annual and sales programs, executive and board compensation negotiation, total remuneration for international and expatriate compensation, pay-for-performance systems, and work/life programs.

L O C K T O N C O M P A N I E S

Total Rewards for a Multigenerational WorkforceHow Can Healthcare Maintain a Competitive Edge

7S:\COM\PowerPoint Presentations\Healthcare Total Rewards 7994.pptx

Why Total Rewards

Shortage of skilled workers (Nurses, LPN, CNA’s) to fill projected needs

Unable to attract the “right” talent Current employees are not fully engaged (long hours, difficult work

environment in healthcare) Cost-shifting in company-sponsored health benefit plans Reductions in company-funded retirement plans Flat or shrinking salary adjustment pools Generational workforce diversity—different perceptions and needs


What is the Purpose of a Total Rewards Strategy?

Reinforce the core mission and vision of the organization Define what the core elements will create appropriate competitive

advantage Provide clarity regarding talent management decisions to key

stakeholders Provide guidelines necessary to design a rewards program consistent

with the mission and vision


What it Takes to Attract and Retain

LEAVELack of recognition

No motivationLack of opportunity

STAYChallenging work

Encourage developmentPositive interaction


Top 5 Reasons Employees are Engaged

Connectivity to manager1

Growth and development2

Work experience3

Personal time 4

Challenging work5


Poll Question #1

Do you have a formalized Total Rewards Strategy?


Meet the Generations

• This job is my reward!• Very loyalTraditionalists

• This is so exciting!• Optimistic

Baby Boomers(1946–1964)

• Is there an app for that?• Very independent

Generation X(1965–1980)

• And why are we doing this? • Need meaningful work and life

Generation Y(1981–2000)

• Not enough information to determine this group

Generation 2020(Born after 2000)


Multigenerational Workforce Differences

BORN Baby Boomers Generation X Generation Y (Millennials)

Elements 1946–1964 1965–1980 1981–2000Values Participation equity Balance between life and

work Diversity/morals

Authority Non-authoritarian Dislikes close supervision Respectful of early generations

Characteristics Optimistic Highly motivated Can-do attitudeWork Priorities To be a star Fun and flexible Money/career developmentTraining Skill practice Visional stimulation Mentor programsTechnology Willing to learn Technologically savvy Technologically superiorCareer Goal Build a stellar career Build a portable career Build parallel careersWork/Life Need Assistance Balance Meaningful balanceCompensation Fixed Salary/LTI/Stock Fixed salary/STI STI/commissionBenefits Security Portability EducationRetirement and Wealth Need Retirement planning Build wealth Education/portability


The Building Blocks of Total Rewards

Compensation

Benefits Healthcare

Medical Prescription Dental Vision

Death and disability

Retirement Paid time off Long-term care Wellness Voluntary Benefits

Workplace Experience

Growth and development Talent management Succession planning Communication Connectivity to supervisor

and leadership Work/life benefits Corporate leadership Recognition

Base salary Variable pay

Annual incentives

Gain sharing Profit

sharing

Long-term incentives

Pay for performance

Sales compensation


Total Reward

s Progra

m

Performance

Management

Fixed Pay

Variable Pay

Work—Life

Learning and

Development

Time Off

Savings/Retireme

nt

Health and

Welfare

Sample Total Rewards Strategy

BusinessNeeds

EmployeeNeeds

Total Rewards

Programs

Employee Needs

Busi

ness Needs


Sample Workforce Engagement Strategy


Total Rewards Design Process

Employee Needs

Busin

ess Needs

Total Rewards

Programs

Business goalsCustomer needsProgram costs

Employee expectations

Survey the marketSurvey employees

Review current plan design

Identify business implications

Conduct gap analysis

Recalibrate HR strategy

Design Total Rewards program to support

strategyAssess financial

implications

Present HR strategyShow link of Total

Rewards programs to strategy

Present financial impact

Communicate

RecommendStrategizeAssessUnderstand

PROCESS TO DESIGN TOTAL REWARDS PROGRAMS


Design Process: Internal/External

Conduct Employee Climate Survey and Use Demographic Data Many of our healthcare clients have turnover and want to know from

employees why and what can make a difference Conduct External Total Rewards Market Analysis

Labor market—lose to/draw from Specific healthcare organizations (retirement/long-term care, multispecialty

clinics, hospitals) Scope and demographics

Custom Survey of Total Rewards (Peer Group) Specific comp, benefit, retirement, work-life questions to a specific peer

group Maintain desired positioning vs. market

Internal vs. external pay competitiveness Compensation, benefits, and retirement competitiveness against peers


Sample Total Rewards Questions

What is the organization’s value proposition/vision/mission? Do you think your reward programs support your short and long term

business strategies? Which of your reward programs are most and least effective in

support the mission and culture of the organization? Which programs do you believe are most important to the

organization? Do you think your employees are engaged and if so do you think it is

because of certain rewards they are offered?


Total Rewards Questions

How do you attract and retain top talent? Who would you consider your peer group and would you like to anchor

your philosophy to match their current strategies? Where do you think you should anchor your pay and benefits—50th

percentile, below or above? How does variable compensation play a role in total compensation

package and what should the mix of pay be? Do you consider you organization a “pay for performance” culture? What rewards do you feel are “missing” from the package?


Poll Question #2

Do you use retention bonuses or any other type of variable compensation to retain your top nurses or

other talent?


Total Rewards Questions

Do you have a particular philosophy you would like to see the organization take when developing a total rewards strategy?

Do the leaders of the organization have a particular philosophy which needs to be considered when making decisions regarding total rewards?

Are you in high growth mode or stability mode? Are you facing market pressures? Are you focused on a specific market segment?

Do you have trouble attracting or retaining talent? What are your critical positions?

Why do you think your employees come to work for you?


Identify Strengths/Weaknesses of Existing Reward Plans

SWOT AnalysisStrengths

• Which reward programs are effective today?

• What should we keep and/or emulate?

Opportunities

• How can we best meet the demands of key stakeholders?

• How competitive are our programs?

• What are the employees' perception of total rewards?

Threats

• What conditions threaten business success?

• How do existing plans fail to respond to external conditions?• How do existing plans fail to respond to internal conditions

within the organization?

Weaknesses

• Which plans do not work today?• What and how much needs to

change?• What are the market conditions

and are we competitive?


Build awareness which all generations bring opportunities and strengths as well as challenges Diversity is good Not everyone fits into one mold Each group communicates

differently Communicate to motivate

Effective communication will motive people

Misunderstood comments can have a lasting repercussion

Develop different communication channels (decentralized organization like healthcare can be a challenge…do you have a strategy?)

Train managers on multigenerational communication

Communication


Communication in the Workplace

Generation Preferred Method Suggested WaysTraditionalist

MemosLettersPersonal notesIndividual interaction

Words and tone of voice should be respectful, language should be more formal and professional and the message should relate to long-term goals

Boomers Face to facePhone callsPersonal interaction

Informal conversations over coffee or lunch, ask about mutual interests, make the conversation participative, link message to the team or individual results

Gen X VoicemailEmailCasualDirect/immediate

Don’t waste time, be direct and get to the point, avoid corporate speak, send email or voicemail clearly stating what you want

Gen Y Digital (instant)Text messageBlogsCollaborative interaction

Be positive, send a text message to get their immediate response, instant messaging, don’t be condescending, communicate about personal and professional development opportunities


Communication Channels

Total rewards/compensation statements Town Hall meetings FAQ’s or summary statement on the intranet Placards Manager meetings Webex presentations Develop a salary management “APP”


Conduct employee survey to determine employee perceptions

Conduct a total rewards strategy session (Senior Leadership) Use the total rewards questions

From the strategy session develop the total rewards strategy Philosophy/vision/mission Elements of rewards Design platform or dashboard

Communicate to the multigenerational workforce appropriately Use different forms of

communication Engage managers to understand

the programs and how to work with a multigenerational workforce

Final Thoughts

Appendix

Sample Analysis Results


Quantifying the Results: Total Rewards Value Analysis

ABC Company

Division A Division B Division C Market $-

$5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000

$54

,343

$50

,482

$69

,607

$65

,298

$58

,208

Average Total Rewards Value, Per Employee

Base Pay70.0%

Paid Time Off

6.0%

Benefits18.0%

Short-Term Incen-tives6.0%

Distribution of Total Rewards, Sample Company

Base Pay66.6%

Paid Time Off6.7%

Benefits22.2%

Short-Term Incen-tives4.5%

Distribution of Total Rewards, Market


Lockton conducted a total rewards analysis of Medical, dental vision, LTD, STD,

Life, AD&D Base salary, total cash, target

incentive 401(k) and PTO

Executive Summary

Results indicate the following Health and welfare

Cost is within market norm Value is above market norm

Paying at the market for base salary

Paying above the market on total cash (including profit sharing)

Paying at the market for target incentive

Above market for 401(k) Above the market on PTO


Total Rewards Summary

Total Summary

Employee Category# of Employees

in Study Total Market ValueTotal ABC CO

ValueVariance % - ABC to Market

Executive 9 $2,744,677 $3,057,754 112.2%Director 14 $2,523,690 $2,850,709 113.5%Manager 15 $1,802,538 $2,027,438 112.0%Supervisor 8 $635,760 $647,262 101.3%Prof/IC 45 $3,994,768 $4,292,336 106.9%Admin/Tech 147 $6,978,594 $6,672,894 95.2%Grand Total 238 $18,680,026 $19,548,393 100.4%

Total Rewards Value


Total Rewards SummaryCompensation, Benefits, 401(k), and PTO

Compensation Benefits

Employee CategorySum of Market - Total

Cash 50thSum of ABC - Total

Cash CompVariance % -

ABC to MarketSum of Market - Total Benefits

Sum of ABC - Total Benefits

Variance % - AiBC Co to Market

Executive $2,463,485 $2,938,527 119.3% $98,573 $127,785 129.6%Director $2,227,781 $2,641,973 118.6% $153,335 $198,177 129.2%Manager $1,488,744 $1,878,488 126.2% $164,288 $170,779 104.0%Supervisor $499,599 $567,108 113.5% $87,620 $91,136 104.0%Prof/IC $3,220,460 $3,881,974 120.5% $492,864 $441,034 89.5%Admin/Tech $4,993,460 $5,395,842 108.1% $1,610,022 $1,275,582 79.2%Grand Total $14,893,530 $17,303,911 116.2% $2,606,702 $2,304,493 88.4%

Employee CategorySum of Market - 401k Employer Contribution

Sum of ABC - 401K Employer

ContributionVariance % - ABC

to MarketSum of Market -

PTO ValueSum of ABC -

PTO ValueVariance % - ABC to Market

Executive $59,037 $68,877 116.7% $123,582 $181,399 146.8%Director $39,089 $45,827 117.2% $103,484 $157,296 152.0%Manager $40,604 $47,497 117.0% $108,902 $127,255 116.9%Supervisor $11,538 $13,887 120.4% $37,003 $37,349 100.9%Prof/IC $79,371 $93,302 117.6% $202,072 $233,286 115.4%Admin/Tech $113,144 $134,204 118.6% $261,967 $281,870 107.6%Grand Total $342,784 $403,595 117.7% $837,011 $1,018,455 121.7%

401(k) PTO

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Using total rewards to engage healthcare’s multigenerational workforce

Healthcare

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