Given today’s market, organizations are increasingly recognizing the critical role of a total rewards program in attracting and retaining top talent. But many organizations may not realize that a successful total rewards strategy goes well beyond traditional compensation structures to encompass a wide spectrum of valuable elements.
Keep reading for some key strategies for creating a total rewards program that meets the increasingly diverse needs of your workforce while aligning with your company values and driving long-term employee satisfaction.
What is a total rewards program?
A total reward program is a comprehensive offering by organizations to their employees consisting of compensation, benefits, wellbeing programs, career development opportunities, and recognition initiatives. It doesn’t just entail traditional salary structures, but additional elements that contribute to employee well-being, job satisfaction, and personal growth and development.
A successful total rewards program will make employees feel valued, supported, and motivated, ultimately leading to a strong and positive company culture.
What does a total rewards program include?
Total rewards programs can include potentially hundreds of elements – the only limit is the imagination. Typically, they are broken down as follows:
- Compensation: Compensation refers to the total remuneration offered by an organization. Examples include base wages, premium pay (such as on-call and holiday pay), variable pay (such as commissions and bonus programs), perks (such as company car, transportation stipends, and phone bill reimbursement), incentive programs (such as profit-sharing and performance shares), and severance pay.
- Benefits: Any of several benefits may be included, such as health, welfare, income protection, financial preparedness, retirement, and pay for time off, to promote wellness and security for employees and their families.
- Wellbeing programs: Workplace wellbeing programs support physical, emotional, mental, financial, and environmental factors. The result is enhanced productivity and overall happiness. Examples of diverse and inclusive initiatives include work flexibility (remote and hybrid work schedules), wellness screenings, on-site massage, and fitness programs. Additionally, community involvement (such as community volunteer programs and employee grants for community service) and dependent care (such as childcare spending accounts, on-site childcare, and elder care).
- Career growth and development: Such programs provide employees with opportunities to advance their skills and enhance their employability. This can encompass anything from regular 1:1 meetings and mentoring or coaching to industry conference tickets and tuition reimbursement.
- Recognition: Recognition elements are all about expressing gratitude and validating individual and group contributions. Examples include awards, appreciation events, awards, and various awards, such as service awards and peer recognition awards.
Strategies for a successful total rewards program
1. Focus on the employee value proposition
Perhaps more fundamental than any other strategy, aligning your total rewards program with your EVP (employee value proposition) is essential for creating a workplace that resonates with employees.
To bolster the EVP, organizations should align rewards, recognition, and development with their unique values and goals. By doing so, they will attract individuals with the same values and goals while also creating a workplace where employees can truly have a sense of purpose and fulfillment in their roles.
In this way, a well-structured total rewards program is a powerful tool for demonstrating an organization’s unique workplace culture – let your culture shine. Beyond the conventional cash and non-cash rewards, organizations should incorporate perks that distinctly demonstrate their unique culture. For instance, a company valuing innovation might introduce creative workshops or projects as part of its total rewards program.
2. See how you can differentiate yourself
The ultimate goal isn’t to just meet potential and current employees’ needs but to help differentiate the organization. Especially when trying to attract top talent, more and more employers are looking to differentiate themselves through their total rewards programs. Offering unique programs that go beyond traditional salary plus benefits reinforces an organization’s commitment to their employees’ happiness and well-being.
Find out what competitors are offering to their own employees to spark ideas for how you can stand out. There are as many ideas for distinctive offerings as there are companies out there. Companies that strive to be different just be different, though, will see less success than those that seek to differentiate themselves while also ensuring their unique employee rewards complement their EVP and company culture.
3. Consider offering employees choices
The workforce has never been so diverse – representing an assortment of cultures, backgrounds, experiences, and generations. In such a landscape, it’s increasingly difficult to develop a rewards program that appeals to all employees. For this reason, consider offering employees personalized choices under the total rewards spectrum.
Empowering individuals to tailor their rewards to align with their values and priorities enhances their overall employee experience while demonstrating a commitment to employee-centric practices. In light of more demand for flexibility among employees, a choose-your-own total rewards approach is likely to become more and more popular in the coming years.
4. Consider generational differences
Today’s workforce comprises multiple generations. From Traditionalists, Baby Boomers, and Generation X to Millennials and now Generation Z, each group brings their own unique perspectives, values, and work styles. For example, family-related benefits may appeal to those raising families, other generations may appreciate different perks more, like being able to bring their dog to work or paid time off for community service.
Recognizing these differences is key to designing a total rewards program that appeals to all employees, regardless of when they were born. Make sure your program offers a wide range of benefits that caters to each of the generations and, as suggested above, allow for some flexibility if possible by allowing employees to pick and choose their preferred perks.
5. Flexible work is here to stay
Even with the pandemic behind us, remote work remains a hot topic among employees. Whether organizations like it or not, employees prefer to have at least a hybrid schedule where they can split their time between the office and home. Embracing flexible work culturally and in a total rewards program will help organizations attract new talent and retain current employees by demonstrating they care about work-life balance.
6. Incentivize through bonuses
Another popular reward among job candidates is offering variable pay above the base salary, otherwise known as bonuses, incentives or commission. These structures may be tied to individual productivity, team goals, or overall company performance and they can be a powerful motivating force for employees, which can be a win-win strategy for companies looking to attract and retain employees as well as meet organizational objectives.
7. Utilize a total rewards statement
A total rewards statement, also known as a total comp statement, provides employees with visibility into both the cash and non-cash elements of their total compensation package. While there are advantages and disadvantages, utilizing a total rewards statement helps employees understand the full value of the benefits they’re receiving from the organization beyond just salary or wages.
The drawback to implementing such a statement can be the challenge of demonstrating the intangibles offered by your organization, such as work-life balance and an innovative culture. A well-designed statement showcases the holistic value a company offers its employees beyond cash and non-cash rewards.
Summing it all up
As organizations navigate an increasingly diverse workforce, a strategically designed total rewards program can be a highly effective way to not only attract and retain talent but also keep them motivated, resulting in a positive and productive work environment. For more tips, download our free e-book, The Insperity guide to being a best place to work.