Using total rewards to engage healthcare’s multigenerational workforce

Total Rewards for a
Multigenerational
Workforce
How Can Healthcare Maintain a
Competitive Edge
Guest Presenter:
Mary Mosqueda
Practice Leader | Lockton Companies
Webinar & Podcast Series

AGENDAThe Series
HealthcareSoftwareHub
webinar & podcast series
Healthcare Software Series

AGENDAWebinar Info
 We are informal (and fun)
 Ask Questions!
 Q&A Session at end
 HRCI Credit
 Slides will be available after

AGENDAAGENDA
Talent Management for Healthcare
 Recruiting
 Compensation & Total Rewards
 HR Service Delivery
The Sponsor
Thank You to our Webinar Sponsor!
HealthStream.com

AGENDAAbout the Presenter
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 Workforce
How Can Healthcare Maintain a Competitive Edge

6
S:COMPowerPoint PresentationsHealthcare 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

7
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

8
What it Takes to Attract and Retain
LEAVE
Lack of recognition
No motivation
Lack of opportunity
STAY
Challenging work
Encourage development
Positive interaction

9
Top 5 Reasons Employees are Engaged
Connectivity to manager
1
Growth and development
2
Work experience3
Personal time4
Challenging work
5

10
Poll Question #1
Do you have a formalized Total Rewards Strategy?

11
Meet the Generations
• This job is my reward!
• Very loyal
Traditionalists
• 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)

12
Multigenerational Workforce Differences
BORN Baby Boomers Generation X
Generation Y
(Millennials)
Elements 1946–1964 1965–1980 1981–2000
Values 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 attitude
Work Priorities To be a star Fun and flexible Money/career development
Training Skill practice Visional stimulation Mentor programs
Technology Willing to learn Technologically savvy Technologically superior
Career Goal Build a stellar career Build a portable career Build parallel careers
Work/Life Need Assistance Balance Meaningful balance
Compensation Fixed Salary/LTI/Stock Fixed salary/STI STI/commission
Benefits Security Portability Education
Retirement and Wealth
Need
Retirement planning Build wealth Education/portability

13
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

14
Total
Rewards
Program
Performance
Management
Fixed Pay
Variable Pay
Work—Life
Learning and
Development
Time Off
Savings/
Retirement
Health and
Welfare
Sample Total Rewards Strategy
Business
Needs
Employee
Needs
Total Rewards
Programs
Employee
Needs

15
Sample Workforce Engagement Strategy

16
Total Rewards Design Process
Employee
Needs
Total Rewards
Programs
Business goals
Customer needs
Program costs
Employee expectations
Survey the market
Survey employees
Review current plan
design
Identify business
implications
Conduct gap analysis
Recalibrate HR strategy
Design Total Rewards
program to support
strategy
Assess financial
implications
Present HR strategy
Show link of Total
Rewards programs to
strategy
Present financial impact
Communicate
RecommendStrategizeAssessUnderstand
PROCESS TO DESIGN TOTAL REWARDS PROGRAMS

17
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

18
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?

19
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?

20
Poll Question #2
Do you use retention bonuses or any other type of variable
compensation to retain your top nurses or other talent?

21
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?

22
Identify Strengths/Weaknesses of Existing Reward Plans
SWOT Analysis
Strengths
• 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?

23
 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

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Communication in the Workplace
Generation Preferred Method Suggested Ways
Traditionalist Memos
Letters
Personal notes
Individual 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 face
Phone calls
Personal 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 Voicemail
Email
Casual
Direct/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 message
Blogs
Collaborative
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

25
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”

26
 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

28
Quantifying the Results: Total Rewards Value Analysis
$54,343
$50,482
$69,607
$65,298
$58,208
$-
$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
ABC Company Division A Division B Division C Market
Average Total Rewards Value, Per Employee
Base Pay
70.0%
Paid Time
Off
6.0%
Benefits
18.0%
Short-
Term
Incentives
6.0%
Distribution of Total Rewards, Sample Company
Base Pay
66.6%
Paid Time
Off
6.7%
Benefits
22.2%
Short-
Term
Incentives
4.5%
Distribution of Total Rewards, Market

29
 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

30
Total Rewards Summary
Total Summary
Employee Category
# of Employees
in Study Total Market Value
Total ABC CO
Value
Variance % -
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

31
Total Rewards Summary
Compensation, Benefits, 401(k), and PTO
Compensation Benefits
Employee Category
Sum of Market - Total
Cash 50th
Sum of ABC - Total
Cash Comp
Variance % -
ABC to Market
Sum 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 Category
Sum of Market - 401k
Employer Contribution
Sum of ABC -
401K Employer
Contribution
Variance % - ABC
to Market
Sum of Market -
PTO Value
Sum of ABC -
PTO Value
Variance % -
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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