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The 2025 Playbook Isn’t Enough
The 2025 Total Rewards Leader Priorities study by WorldatWork (source: https://worldatwork.org/research/total-rewards-leader-2025-priorities) captures valuable insights for today’s HR leaders. Furthermore, it highlights employer focus areas such as benefits optimization, better communication, and tighter alignment with business goals. However, when we assess this study with a forward-thinking lens toward 2030 workforce challenges, several critical gaps emerge.
By 2030, your organization will operate in a different world. Additionally, AI will drive change while Gen Z and Alpha reshape expectations. ESG demands will influence decisions, and borders will no longer limit talent. Yet this study seems more concerned with tuning up current programs than preparing for the future.
Here’s where today’s Total Rewards vision falls short. Moreover, HR leaders must act now to address these gaps.
Skills Revolution & Career Fluidity: Future Talent Requires Future Incentives
WorldatWork’s report fails to mention the reskilling need. According to the World Economic Forum, “1.1 billion jobs are liable to be changed by technology in the next decade.”
Source: https://www.weforum.org/reports/the-future-of-jobs-report-2023
Meanwhile, McKinsey stresses that companies building skills-based talent models outperform competitors. These companies show better agility and retention rates.
Source: https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/building-a-skills-based-organization
Yet the study includes no mention of several key areas. First, skills-based compensation remains absent from discussions. Second, learning sabbaticals receive no attention. Third, upskilling bonuses lack coverage. Finally, career mobility rewards get no mention.
Without incentives for adaptability, we risk rewarding outdated skills. Instead, we should focus on future-ready growth. Companies need to shift their reward systems to match evolving skill needs.
For example, a compensation analyst aiming to measure skills velocity would need more than spreadsheet proficiency or survey benchmarking experience. They would require fluency in tools like Python or R to run regression models on skill premiums, and the ability to integrate dynamic skills taxonomies into compensation systems. They might leverage real-time labor market analytics from platforms like Lightcast or SkyHive, while aligning pay bands with emerging skills demand. This analyst would also partner with talent development teams to correlate upskilling progress with comp adjustments, supporting agile pay decisions that match career pivots or new tech adoption cycles. In essence, the compensation analyst role itself must evolve to track, quantify, and reward workforce adaptability at scale.
Companies Already Getting It Right
While most organizations lag behind, some forward-thinking companies implement skills-based rewards now. These early adopters show the way forward for others.
Amazon’s Career Choice Program pre-pays tuition for employees. Workers gain skills in high-demand fields through this program. Even if those skills lead them to other companies, Amazon benefits. This approach has boosted retention and employer brand.
IBM’s SkillsBuild platform ties internal skill certifications to salary adjustments. Workers see clear pathways for career advancement based on ability, not tenure. Promotion eligibility connects directly to skill development.
Unilever’s “Future Fit” initiatives include sustainability skills in their core framework. Their bonus structures reward employees for developing climate-conscious business skills. This approach aligns rewards with company values.
Generational Workforce Change: Younger Talent, New Expectations
The study emphasizes benefits optimization and wellness programs. It also mentions leave updates as key priorities. But it misses the massive value shift incoming with Gen Z and Alpha workers.
According to Deloitte, “The vast majority of Gen Zs (86%) say having a sense of purpose is important.”
Source: https://www2.deloitte.com/global/en/pages/about-deloitte/articles/genzmillennialsurvey.html
A Pew Research report adds that younger generations expect meaningful work environments. They want socially responsible workplaces as well.
Source: https://www.pewresearch.org/fact-tank/2023/09/20/gen-z-and-the-future-of-work/
Yet WorldatWork focuses on traditional benefits. It overlooks several key areas that matter to younger workers. Purpose-aligned rewards receive no mention. Experiential incentives lack attention. ESG-linked compensation gets ignored. Social impact sabbaticals remain absent from discussions.
These are table stakes for the next generation of top talent. Companies that ignore these elements will struggle to attract quality workers.
For example, a compensation analyst preparing for this generational shift would go beyond demographic benchmarking. They might analyze preference data from employee engagement platforms, align reward frameworks with values-based criteria like sustainability or DEI (where permitted), and propose flexible benefits packages tailored to generational personas. They’d be tasked with understanding social media sentiment around employer brand and integrating purpose-driven metrics into variable compensation design.
Beyond Purpose: What Gen Z Really Wants
Beyond purpose and flexibility, younger generations expect two key things. First, they demand radical transparency in all processes. Second, they want personalized experiences that fit their needs.
Real-Time Compensation Transparency drives Gen Z expectations. They expect to understand not just their pay, but peer comparisons too. Market rates should be visible in internal systems. They want Glassdoor-level transparency built into company platforms.
Micro-Learning Incentives appeal more than annual training budgets. Younger employees prefer small, frequent learning rewards instead. For example, $50 bonuses for completing relevant online courses work well. Earning micro-certifications should trigger immediate recognition.
Mental Health Integration must go beyond EAP programs. Future rewards must address the mental health crisis directly. This includes mental health days as standard PTO. Meditation app subscriptions should be standard benefits. Therapy coverage without copays becomes essential.
Workforce Agility: The Rise of Projects, Not Positions
By 2030, org charts will flatten significantly. Talent mobility will accelerate across all industries. Teams will form and dissolve around projects, not permanent roles.
Harvard Business Review explains this shift clearly. “Talent marketplaces give people greater control over their careers. They also let companies mobilize internal talent more effectively.”
Source: https://hbr.org/2022/05/the-rise-of-the-internal-talent-marketplace
WorldatWork mentions innovation, but lacks guidance for:
Companies must prepare their reward systems for this shift. Traditional performance reviews won’t work for project-based teams. Instead, organizations need flexible recognition systems that adapt to changing team structures.
For example, a compensation analyst in an agile environment would monitor team contributions across cross-functional projects and recommend recognition tools that reward impact over tenure. They might develop project-based incentive models that integrate data from internal talent marketplaces, ensuring that contributors to short-term strategic initiatives are compensated proportionally to outcomes—not just job titles.
Sustainability & ESG Integration: Gen Z Is Watching
Sustainability now drives core employment decisions. Yet the study makes no mention of ESG-linked incentives. This gap represents a major oversight for future talent attraction.
PwC reports that over 70% of global companies now tie ESG metrics to executive compensation. This trend will expand to all employee levels soon.
Source: https://www.pwc.com/gx/en/services/people-organisation/global-executive-compensation-and-esg.html
Semler Brossy adds important context to this trend. “ESG metrics are being used in 73% of S&P 500 companies’ incentive plans.”
Source: https://www.semlerbrossy.com/insights/2024-esg-and-incentive-design-report/
Your future rewards system should include several green elements. Carbon impact bonuses can drive behavior change. Volunteerism incentives support community engagement. Green equity grants align personal and company goals. ESG-aligned KPIs measure what matters most.
For example, a compensation analyst supporting ESG integration might tie employee bonuses to carbon footprint reduction, community volunteer hours, or sustainability innovation KPIs. They could collaborate with CSR and finance teams to ensure that ESG scorecards are measured consistently and used meaningfully in performance reviews and incentive calculations.
Human-AI Collaboration: Rewarding What Can’t Be Automated
As AI assumes routine tasks, Total Rewards must highlight human strengths. Companies need to reward what makes workers uniquely human.
MIT Sloan writes about this shift clearly. “The future of work is not about competing with AI. It’s about building human strengths around it.”
Source: https://sloanreview.mit.edu/article/the-future-of-work-is-human/
McKinsey emphasizes that jobs of the future focus on specific skills. Empathy becomes more valuable than data processing. Critical thinking matters more than routine analysis. Creativity outweighs repetitive tasks.
Source: https://www.mckinsey.com/featured-insights/future-of-work/the-future-of-work-after-covid-19
HR must adapt rewards to recognize key human abilities. Creativity and storytelling deserve recognition. Cross-cultural empathy creates business value. Complex collaboration drives team success. Strategic thinking in AI-powered settings becomes essential.
The Tech Stack Challenge: Infrastructure for Future Rewards
Most HR systems weren’t built for 2030-ready rewards complexity. Companies need new technology to support evolving compensation models.
Real-time Analytics Platforms solve traditional HRIS limitations. These systems can’t handle dynamic, skills-based compensation models effectively. You need platforms that integrate market data with internal performance metrics. Peer benchmarking should happen in real-time.
AI-Powered Market Intelligence replaces static salary surveys. Skill premiums change quarterly in today’s market. Future-ready organizations use AI tools that continuously scrape job postings. These systems analyze compensation trends and alert HR to market shifts.
Blockchain for Credential Verification grows more important as skills-based pay expands. The need for trusted skill verification increases with this trend. Blockchain-based credentialing systems prevent employees from gaming the system. They also create portable skill records that follow workers throughout their careers.
For example, a compensation analyst navigating AI-human collaboration would develop differential rewards for tasks requiring human judgment, such as ethical decision-making or empathy in client service roles. They may also design bonus pools tied to innovation outcomes that leverage human-AI teams, tracking productivity uplift from augmented tools like GPT-powered analytics or recommendation engines.
Global Talent Competition: Borders Are Dead, Compensation Must Catch Up
Remote work has globalized the labor market completely. But WorldatWork still leans on location-based pay models. This approach limits competitive advantage in global talent markets.
Harvard Business Review states this shift clearly. “Location-based pay is becoming obsolete as remote hiring crosses borders.”
Source: https://hbr.org/2023/06/its-time-to-rethink-location-based-pay
Mercer urges companies to prepare for geo-neutral pay frameworks. This preparation helps companies stay competitive in global markets.
Source: https://www.mercer.com/our-thinking/career/global-talent-trends.html
Future-ready Total Rewards must address several key areas. First, companies should reconsider local pay bands. Second, they must include global market data in decisions. Third, currency variability needs attention. Finally, pay transparency must become normal practice.
For example, a compensation analyst working across borders would use geo-benchmarking tools to calibrate ranges across markets, model total compensation against remote-equivalent roles, and ensure parity in mobility packages. They might also support rolling out compensation transparency policies that communicate rationale across jurisdictions while maintaining compliance.
Navigating the Compliance Minefield
Future-ready rewards create new legal challenges for HR teams. Companies must plan carefully to avoid compliance issues.
Pay Equity Compliance remains crucial even with skills-based pay. Equal pay legislation still applies to new models. Document skill assessments carefully and audit for bias regularly. This protection shields companies from legal challenges.
Global Employment Law affects geo-neutral pay strategies significantly. Varying labor laws create complexity across jurisdictions. Minimum wage requirements differ by location. Benefits mandates vary widely between countries.
Data Privacy concerns grow with AI-powered performance tracking. Privacy regulations like GDPR and CCPA apply to reward systems. Emerging AI regulations will add more compliance requirements. Ensure your future rewards technology meets all privacy standards.
The Human Side: Managing the Transition
Even well-designed future rewards systems fail without proper change management. Companies must address the human element of transformation.
Address the “Fairness Anxiety” that skills-based pay creates. This system creates winners and losers among current employees. Communicate transparently about transition timelines to build trust. Provide clear skill development pathways for affected employees.
Train Managers as Coaches for the new environment. Project-based reward systems require different management approaches. Managers must shift from evaluators to coaches. This change requires significant retraining and mindset adjustment.
Create Psychological Safety for employees during the transition. Workers need permission to experiment and fail while developing new skills. Build this safety into your performance review process. Encourage risk-taking and learning from mistakes.
Measuring Success: ROI Metrics That Matter
Traditional HR metrics won’t capture future-ready rewards value. Companies need new measurement approaches to track success.
Skills Velocity measures how quickly employees acquire new capabilities. It also tracks how they apply skills to business outcomes. Future-ready organizations see 40% faster skill development rates.
Cross-Functional Engagement tracks employees contributing outside their primary role. This percentage should increase 25-30% in agile reward systems. Higher engagement indicates successful system implementation.
Purpose Alignment Scores come from regular pulse surveys. These measure how well rewards align with personal values. Gen Z retention correlates directly with purpose-alignment scores above 4.2/5.0.
ESG Impact Multiplier measures business outcomes per dollar spent on sustainability-linked incentives. Leading companies see 3:1 returns on green bonus investments. This metric proves the business value of ESG integration.
Final Word: Fine-Tuning Today Won’t Prepare You for Tomorrow
Yes, WorldatWork’s report highlights valuable steps for improvement. Better communication, transparency, and leadership alignment matter greatly. But it stops short of transformative strategy needed for future success.
Forrester warns about the consequences of inaction. “Organizations that fail to evolve their rewards strategies will become irrelevant by 2030.”
Source: https://www.forrester.com/report/future-of-work-trends-2024
We need more than marginal improvements in current systems. Bold redesign becomes necessary for future competitiveness. Companies must act now to avoid becoming irrelevant in the talent market.
Key Takeaways
- Skills-based pay and learning incentives are non-negotiable by 2030
- Gen Z and Alpha expect flexibility, purpose, and sustainability in rewards
- Project-based work requires cross-functional, agile rewards design
- ESG-linked compensation will become a key differentiator
- AI will redefine
- What we reward—favoring creativity and complex thinking
- Compensation must adapt to a truly global, geo-neutral talent market
The 18-Month Transformation Timeline
Foundation Assessment (Months 1-3)
- Conduct comprehensive skills gap analysis across all departments.
- Survey employees on reward preferences by generation to understand needs.
- Audit current technology capabilities for future requirements.
- Benchmark against truly future-ready competitors in your industry.
Pilot Program Launch (Months 4-9)
- Test skills-based bonuses in 1-2 departments first.
- Launch ESG-linked incentives for leadership team members.
- Implement peer recognition platform for immediate feedback.
- Begin collecting global market data for compensation decisions.
Scale and Refine (Months 10-15)
- Expand successful pilots organization-wide across all teams.
- Integrate AI tools for market intelligence and data analysis.
- Launch cross-functional project rewards to encourage collaboration.
- Begin geo-neutral pay conversations with leadership and employees.
Full Integration (Months 16-18)
- Complete system integration across all HR platforms.
- Launch comprehensive change management program for all employees.
- Establish measurement and ROI tracking for new systems.
- Prepare for 2030 workforce influx with refined processes.
Quick Implementation Checklist
- Assess current total rewards strategy gaps
- Survey employees by generation for preferences
- Identify 2-3 pilot departments for testing
- Research AI-powered compensation tools
- Develop ESG metrics for leadership incentives
- Create cross-functional project reward framework
- Plan change management communication strategy
- Establish success metrics and tracking systems
Call to Action
The window for proactive transformation is closing rapidly. Companies that wait until 2028 to begin this journey will find themselves competing for talent with outdated tools. Meanwhile, forward-thinking organizations will have secured the best talent.
Start with a 90-minute assessment: We’ll audit your current Total Rewards strategy against 2030 workforce requirements. Then, we’ll identify your top three transformation priorities.
Join the Future-Ready Cohort: Partner with other forward-thinking organizations in our quarterly benchmarking sessions. Share best practices and learn from industry leaders.
Don’t let your Total Rewards strategy become a competitive liability. Partner with MorganHR to reimagine Total Rewards for the future of work. 📩 https://morganhr.com/contact