How Helpful is Demographic Analysis For Employees Engagement?

Should We Forget Demographics and Focus on the Individual?

A key concern of employers is how to manage different demographics within their workplaces. The challenge is two-fold in order to retain and incentivise, both in terms of:

1. Employee experience – offering flexibility and the right learning and development opportunities, and
2. Benefits packages – designing the right reward system considering the infinite options available, including discounts on tickets, cars allowances and pensions.

HR Directors are increasingly telling us that they are struggling to identify the right benefits packages to select, how to motivate people and how the use of data around the make-up of their business can drive these decisions. Here we examine how helpful demographics are when it comes to designing an effective reward strategy.

The Generation Game

Workplaces must engage up to six or seven generations of workers. Traditionally, demographic groups come into play to identify the common priorities amongst each cross-section of the population. Baby boomers who value benefits such as pensions and medical insurance coincide with millennials who are more driven by values, purpose and making a difference.

Existing generations have 10 to 15 years in between them. Next generations are being created in even shorter time frames of around five years. Each generation is characterised by different sets of values, bringing their own engagement challenges to the future workplace.

Bridging the Gap

Many workers are seeking to avoid a cliff-edge retirement, phasing out their full-time roles in favour of switching to consultancy roles. This enables more senior employees to retain their knowledge and skills built up over the years, whilst leaving businesses with a greater spectrum of generations to manage and engage.

‘Semi-retirement’ also creates a window of opportunity for how the skills pipeline issue can be tackled. The uptake of this gradual transition can mean that a talent pool of those with greater experience can be accessed for longer. This demographic can help to address current recruitment and retention difficulties being faced by employers, with some employers anticipating that Brexit will further exacerbate labour shortages.

Equally, millennials are often characterised as being driven by culture, rather than pay packages and or job security. 80 per cent of millennials are looking to move roles within the next two years, a third within 2019. This fluidity is often attributed to millennials wanting a more varied career that is multi-disciplined and multi-skilled in its approach. Job loyalty is no longer perceived to be as prestigious as it may have been by previous generations.

The Role of Demographics in HR and Reward

When examining how useful demographic models are, they are where many employers start when reviewing reward or HR policies. However, when identifying the right package, many employers we speak to challenge the characterisation of different generations into broad stereotypes. Not everyone is like-minded in these broad-brush personas. There are undeniable trends that emerge in relation to different stages of employees’ lives, but it does not necessarily mean that millennials cannot equally value the benefit of flexible working as much as those looking for semi-retirement. Whilst general themes can guide and direct a broad framework that can be used as a starting point, these need to be robustly tested.

Undertaking workshops to identify what benefits employees truly value can help ensure the right packages are in place. Online surveys can further road-test these answers, asking employees directly and cutting through stereotypes.

Total Reward Statements (TRS) are also an opportunity to tailor packages to the individual as opposed to offering set benefits. The options are clearly set out and can increase the uptake of certain benefits when individuals know what is available to them. TRS are a quick win to capture what employers are doing and reinforce the investment employers are making on their employees’ behalf.

Crucially, it is important to realise that employers should not try to please everyone at the expense of an organisation’s own values. The right reward package and HR approach should promote initiatives that further the vision of the company, such as flexible working, volunteering opportunities and wellness initiatives that reinforce the long-term strategy. By considering the employee value proposition, reward design is an effective tool in the organisation’s recruitment and retention strategy.

Our work with employers demonstrates that the most successful strategies are grounded in a strong loop of evidence and feedback. Listen carefully to your employees. Whilst stereotypes might help create an initial framework for employee engagement, this needs to be examined through the lens of the organisation's values and culture. An accurate and robust approach to employee engagement and reward package design is achieved through testing this directly with the ultimate user: your employees.