Is your total rewards package a sinking ship?
Rewards strategies are designed to attract, motivate, and retain talent, while proving to employees that your organization values their hard work.
Convincing employees their worth is truly appreciated takes much more than paid time off days, market rate salaries, and annual bonuses, especially as the business landscape becomes more competitive.
So, what does it take to achieve total rewards success in today’s world?
We came up with a few things to keep in mind when developing a strategy that wins over employees, and keeps them loyal to your business.
1. Keep Employees in the Loop
Before telling prospective employees how great your total rewards package is, let’s make sure current employees actually know what’s offered to them.
Employers often list compensation, benefits, and perks in the form of bullet points in the employee handbook during an onboarding process. However, the more complex your offerings are, the more likely they will go in one ear and out the other.
To ensure your rewards communications are top notch:
- Explain your philosophies, and how they tie into company objectives and values.
- Speak a consistent language by converting intangible benefits and perks into dollars.
- House everything in one place, and make it accessible by all employees (e.g. company intranet or website).
- Include everything, while breaking up complex initiatives to make them easily digestible.
Don’t let a lapse in communications act as a road block on your journey to improving total rewards. Otherwise, employees can be lost to competitors that provide rewards on par with, or even worse than yours.
In our technology-enabled workplace, keeping employees knowledgeable about how good they have it should be the least of your worries.
2. Advertise your Programs Externally
With the popularity of employer review sites like Glassdoor and Indeed, employees are now armed with knowledge they never had before. According to a recent report, 69% of candidates will not accept an offer from a company if their online reputation is poor, even if they were unemployed.
However, once an employee joins your company, that doesn’t mean you’re in the clear. 84% of employees will consider leaving their current jobs if they receive an offer from a company that has an excellent online reputation.
The top pieces of information employees seek on employer review sites are:
- what makes your company an attractive place to work
- benefits and perks
In short, rewards are the main thing they think about when comparing you to other companies.
Current and potential employees know their value, and have instant access to what the competition is providing.
Just like communicating your total rewards internally, provide information on your website and other places candidates and employees browse. Furthermore, don’t underestimate the power that employees have. If you’re behind on rewards trends, that doesn’t mean they are too.
3. Don’t Try to Buy Happiness
Salary and bonuses play a significant role in an employee’s decision to join or stay at your company. That doesn’t mean employees simply take two numbers, compare them, and go with the larger one when deciding where to take their career.
In reality, salary and bonuses are fungible, meaning your dollars are identical in value and usefulness when compared to your competitors'.
If one employer offers more of an identical asset, it's a clear choice which is the more valuable offer. If your rewards are dominated by financial incentives, and your competitor can simply give more, you lose.
Dodge this trap by exploring alternative, nonfinancial rewards that can help you stand out to employees. Nonfinancial rewards fall into four buckets:
- Recognition (peer-to-peer, formal awards presented by leaders)
- Rewards (gift cards, parking passes, contests)
- Opportunity (concrete promotion paths, leadership opportunities)
- Flexibility (paid time off, work from home, summer hours)
Including these types of incentives adds a creative, personal touch to your total rewards package, which employees will certainly appreciate when comparing you to the competition.
4. Utilize Team Incentives as Your X-Factor
While total rewards efforts are rightfully geared towards the individual employee experience, team-based incentives are your secret weapon when fostering innovative, collaborative work environments.
Whether it’s on a company-wide basis or in a single department, team incentives boost performance by prioritizing shared goals, strengthening bonds between employees, and inspiring employees at risk of disengagement.
The performance benefits of incentives are invaluable, but it’s worth noting that implementing these incentives incorrectly can have negative outcomes such as unhealthy competition. Also, remember that employees will prioritize individual incentives above all else.
That said, prevent unhealthy competition or a “loser” outcome in your programs by supplementing them with recognition of all teams’ efforts.
Regularly ask for feedback from team members for the chance to refine your strategy and better align it with its initial intent.
5. Differentiate for Your Talent Market
Business success is contingent upon providing unique products that target a customer’s needs and personality.
This is no different when tailoring your total rewards portfolio for employees.
Launching initiatives that resonate with your company’s talent pool is the most straightforward way to earning their trust and loyalty.
Looking to attract millennials? Sponsor gym memberships or company sports teams since they likely care about health and wellness. Many employees work abroad? Subsidize a coworking week for them at the headquarters.
What it comes down to is understanding that a one-size-fits-all approach will not excite today’s workforce. Going the extra mile to relate to employees and diversifying your offerings will dramatically improve your odds of success.
6. Identify the Objectives You Want to Solve
Total rewards does not operate in a vacuum, but instead works as a solution to broader HR and business goals. Keep your strategy focused when deciding which changes should be made.
Pulling the levers on employee happiness and business alignment can be a tough balance, but here is a step-by-step process to get started:
- Identify HR and business goals by engaging in strategic dialogue with senior leadership.
- Define a small set of high-level total rewards objectives informed by HR objectives.
- Align total rewards objectives with HR and business objectives by ensuring a logical flow from top to bottom.
- Use the total rewards objectives to make practical benefits and compensation decisions.
- Check consistency with objectives by following the flow from the bottom up.
Another item to weigh in this process is how well your rewards tie in company values and culture. When these components are in harmony with each other, your rewards package will feel genuine to employees, and provide relevant payoffs for the company as well.
Total rewards will continue to encompass influencing factors in employee acquisition and retention.When gaining buy-in from leadership, emphasize the importance of flexibility to pivot as necessary.
Enhance your programs through constant iteration, learning from your market, and keeping an eye on the big picture.
Now that you're ready to conquer total rewards, check out our latest guide -- and get ready to take the next step in building a talent magnet.