Does your Total Rewards Strategy help you attract, hire, engage, and retain the best talent?
What exactly is a Total Rewards Strategy and if you don’t have one, could it be hindering your ability to attract, hire, engage, and retain the best talent? A Total Rewards Strategy includes offering compensation, incentives, and benefits that recognize and reward individuals or teams who achieve company goals and objectives.
The benefits your company offers should reflect your company culture by revealing what you value and how you treat your employees. Over the past 15 months a lot has changed about what an employee values and wants in company benefits. Many employees are looking for benefits and perks that are focused on flexibility and wellness.
An article in Forbes on May 11, 2021 entitled 5 Workplace Benefits on the Rise in 2021 and Beyond which included:
Childcare and Family Benefits. The rise in interest and investment in family and childcare benefits throughout 2020 was noted by family benefits company Cleo. In 2020, Cleo saw a 167% increase in membership and also formed partnerships with companies including Salesforce and Pinterest.
Home Office Expenses. A December 2020 study on the future of work conducted by Upwork examined the transition from temporary remote work to long-term work strategies. The findings predicted that by 2025, 22% of the American workforce would be working remotely, which represents a 87% increase from pre-pandemic numbers. As of fall 2020, 42% of HR leaders reported increased investment in allowances and reimbursements for home office expenses.
Mental Health Support. In January 2021, 41% of adults reported feeling symptoms of depression or anxiety which was up considerable from 2019 data which indicated only 11% of adults experienced anxiety or depression.
In December 2020, McKinsey published a report entitled “Mental health in the workplace: The coming revolution.” This paper detailed the critical need for better mental health services. This issue is not just one of ethics, but also of economics, with workers long-term job performance directly impacted by their overall mental health.
Remove Work and Flexible Schedules. A FlexJobs survey found 96% of workers want to continue to be remote in some capacity, with 65% desiring to stay remote full time. It’s not only the job performance of remote workers that will drive the continued practices of remote work and hybrid schedules—remote work has also saved employers a lot of money. Some predict that remote work could save a company up to $22,000 annually, per worker.
When you consider flexibility, this could include flexibility around a work location, schedule, or offering a shorter work week. Many companies are shortening summer working hours to four days to allow employees to enjoy longer weekends. The ultimate goal should be to offer employees the flexibility to deliver their best work from their preferred location during their preferred time.
Employee Resource Groups. These groups provide a space where issues can be confronted, and companies can provide their employees with resources, support, and opportunities for professional development. Employees can also share experiences and identify related issues within the company.
This past year has also brought the need to address bias and racialized discrimination. Much progress has been made this past year to create a more inclusive workplace and greater accountability as it related to diversity, equity, and inclusion. However, there is much more work to be done and many very talented candidates will not work for a company that has not embraced a strong DEI program.
This is a must-read for anyone responsible for hiring great talent!
Multinational pasta company Barilla provides an excellent example of how to support and encourage diversity through Employee Resource Groups (ERGs). A company of about 8,400 employees, Barilla launched its first ERG in 2015 with just 20 members. Today, the company has 15 ERGs or affinity groups with roughly 1,400 members. This is the type of progress and policy that can really move the needle when it comes to diversity, equity, and inclusion (DEI).
There are other perks you may want to consider as part of your Total Rewards Strategy. Sabbaticals are a highly desired perk and allow your employees to take a month off as a way to reward them for hard work over an extended period of time. Encourage them to write about their time off and share their adventure using hashtags to highlight their adventures.
Millennials now represent more than 1 out of every 3 individuals in the workforce. They are between the ages of 23 to 38, with many of them now becoming parents. As a result, parental-related perks are becoming very desirable. Two examples are providing daycare or providing a cash stipend for new parents.
Mentorship opportunities and mentor programs inside an organization are also priorities to both Millennials and Gen Z. According to MentorCliq, “Leading Fortune 500 clients have improved employee retention by as much as 75% over the past few years through their mentoring initiatives. To continue advancing employee retention efforts, executives are leading by example and becoming more involved in mentoring as mentors or sponsors, which accelerates participation enterprise-wide and leads to a company culture of learning, development, and camaraderie.”
Another perk is offering a wellness program that has the power to lead to meaningful behavior change. It can include a healthy diet, exercise program, stress management, or financial wellness.
Next, consider student loan assistance because 44 million Americans have student loans with an average debt of $33,000. If you want to increase employee loyalty among your younger team members who are usually the ones burdened by student loan debt, offer loan assistance.
Lastly, it’s important to realize the benefits you will gain by developing a strong Total Rewards Strategy. When you offer something to employees your competition cannot, you will attract the best talent and outperform your competitors. A strong Total Rewards Strategy also results in higher employee engagement and retention, which improves their ability to achieve objectives and growth. When rewards are offered for individuals who attain objectives, it motivates employees to elevate their performance.
If you have a Benefits Manager, but not someone who is charged with creating a competitive Total Rewards Strategy, you may want to consider hiring a Dr. of Total Rewards. It’s no coincidence that we’ve placed more individuals in this exact role since January 2021, than we had in the past two years. Developing a Total Rewards Strategy will benefit both your company and the employees.
This person should assess your current total compensation plan, including compensation, benefits, incentives, and perks and complete a GAP Analysis to identify improvements needed. Once your strategy is developed, integrate, and communicate it clearly. We had a client roll out an amazing wellness program without proper communication. As a result, the employees questioned what was being done to them vs. for them.
Ask for input from the employees when developing your Total Rewards Strategies. I’ve only scratched the surface on the many perks and recognition plans you can implement as part of your strategy. When you take your direction from your employees, you will automatically have their buy-in on the programs you roll out. Plan how you will implement incentives and specify criteria that must be met to qualify. Communicate clearly how employees and their managers will measure progress to avoid confusion.
Once you initiate a rewards strategy monitor, evaluate, and make necessary changes to consistently improve the effectiveness of the programs. Your Total Rewards Strategy should improve employee engagement, retention, performance, and help your company consistently achieve company objectives. In this competitive job market, your Total Rewards will also help you attract and hire the best talent!
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