Attracting and retaining top management talent in emerging and
diverse markets challenged PepsiCo’s compensation and benefits team to develop
a program that can generally be applied across the markets, PepsiCo officials
said April 29.
Even with the recent recession and the slow economic recovery
that followed, multinational companies like PepsiCo face competition for managers
in many countries, said Duncan Micallef, a PepsiCo vice president for compensation
and benefits in Asia, the Middle East, and Africa. Using data from various
sources, the company recognized that the amount of turnover and lack of commitment at the
management level were unacceptable, Micallef said at a workshop at the 2013 WorldatWork Total Rewards Conference.
The company, which seeks to be a relevant choice for managers
in those markets, seeks to build a rewards program that stands out through
noncash rewards while meeting the needs of management and reining in costs.
PepsiCo decided to take a
360-degree view of compensation and benefits in 20 countries, said Gregory
Smith, senior director of PepsiCo’s international benefits and wellness program. Basic rewards, such as pay, bonuses, long-term incentives, were in line with the market, but in some cases the rewards program did not correspond with the market, he said.
Several studies and focus-group results on worker
needs and satisfaction were analyzed by PepsiCo’s compensation and benefits
team, Smith said. For example, housing benefits and educational subsidies were not as important in some countries as previously thought, the analysis showed, he said.
With information from the studies, the PepsiCo team built a toolkit that includes flexible benefits to allow
for mixing and matching in different, Smith said.
Five key aspects made up the tool kit:
- competitive pay, especially in high-inflation markets;
- in-depth retention analysis;
- benefits and compensation tools in the kit;
- implementation and communications.
Employers should not disregard the communications component, Smith said. Many employees do not know or understand the
number and amounts of allowances they receive, he said, adding that enhanced communications is
as important as the items in the plan.
The general program was developed in-house with data
from outside organizations to help frame key benefits and compensation issues, Micallef said.
A pilot program was introduced in four markets,
Micallef said. The toolkit included flexible benefits, work-life balance
considerations, training and development opportunities, recognition, cash incentives, and family
benefits, such as children’s educational support and housing assistance, Smith said.
Reducing turnover by 1 percent in some markets makes a big
difference in expenses, Smith said. In one market, where the toolkit was first introduced, costs declined by 2 percent, he said.
By Michael Baer