For employers, it’s a tough balancing act. On the one hand, you want to show your people you care during tumult caused by a lingering pandemic and, of late, inflationary levels not seen in 40 years. On the other hand, your benefits resources are finite.
The fact is that the pandemic and other forces, including a volatile economy and social change, are forcing companies to take another look at how they evaluate and pay for work.
Before the pandemic hit, employers were making measurable inroads toward a total rewards approach that focused on environmental, social, and governance (ESG) issues, in addition to the employee experience, new salary adjustments, pay equity, and a multi-stakeholder model for performance and incentives.
Then came 2020, a year that obliterated traditional notions about why, how, and where employees want to work. The COVID-19 outbreak also served to illuminate some of this nation’s social ills, which resulted in an increased focus on diversity, equity, and inclusion (DEI).
All that notwithstanding, organizations in this tight labor market must still find a way to recruit and retain employees. Continue reading for what you should know about planning and implementing a total rewards system.
Explain Total Rewards
Total rewards encompass the compensation, benefits, and rewards that employees receive from their employer. This means wages as well as career advancement opportunities, workplace development and recognition, and wellbeing.
Essentially, total rewards are anything an employer offers in exchange for a person’s employ, contribution, and commitment.
Embracing a Total Rewards Strategy
The following are some fundamental measures you can take to reimagine your organization’s total rewards strategy.
- Assess current benefits situation. Pull together what your employees make and what benefits you provide. Any results from employee recognition programs should be gathered as well. Then, compare that data against what competitors are offering. While you’re at it, see how you’re faring regarding pay equity, another hot-button issue.
- Learn what your employees value. This is no time to guess. Whether you use surveys or some other means, it’s time to “listen” to your employees to find out what kind of benefits they value. Don’t be like one of the organizations in a recent study that found that only 56 percent of organizations “get” what their employees value, when it comes to total rewards.
- Make sure leaders are on board. It’s crucial that your leaders know how important it is to establish a competitive total rewards strategy. In fact, what you want is total buy in. To pull that off, you’ll need to illustrate to leadership the relationship between a well-considered rewards package and your organization’s ability to attract and hang onto key talent, increased employee satisfaction, and the company’s bottom line.
- Communicate with your workforce. After you’ve set forth priorities, it’s time to apprise your people of the moves you’re making, and why. They will appreciate during these early phases that you’re involving them, so that they’re not caught off guard or made to feel like an after-thought.
- Run the numbers and assess the impact of your rewards plan. It will be pretty straightforward for you to determine what your total rewards program will cost. Evaluating the effectiveness of your moves won’t be as easy. However, a look at employee satisfaction, engagement, absenteeism, and retention levels will give you a good idea.
If you want to remain competitive in a business environment in which unemployment levels are low, you’ll need to plan and implement a total rewards system. If you need help, we recommend leading global benefits consultant Mercer.