It’s a conundrum like never before: it’s imperative that you demonstrate empathy to your people during this tumultuous time, despite the economics of the current situation. But the fact is the pandemic and social change are forcing organizations to reconfigure how organizations assess and pay for work.
Before 2020, organizations globally were making decades-long, slow-but-sure progress toward a new kind of total rewards agenda that emphasized environmental, social, and governance (ESG) issues. These include pay equity, new salary adjustments, the employee experience, and a multi-stakeholder model for incentives and performance.
Then came 2020, which upended long-standing notions about how, why, and where we want to work. The pandemic has also shone a light on some of the social ills in this country, and the glare can be unforgiving. The result has been more of a focus on diversity, equity, and inclusion. Meanwhile, organizations still must be able to recruit and retain employees – in a tight labor market.
Here’s how planning and implementing a total rewards system can help you in that regard.
What is Meant by Total Rewards?
Compensation, benefits and rewards employees get from employers comprise total rewards packages. This means wages, career advancement opportunities, wellbeing, and workplace development and recognition. Essentially, the term means anything an organization offers in exchange for an employee’s employ, contribution, and commitment.
Putting in Place a Total Rewards Strategy
Here are some elemental measures you can take to reimagine your total rewards strategy.
- Evaluate what you’re doing now. Gather all the facts, what your employees are making, and what benefits you provide. If you have any results from an employee recognition program, get those together, too. Then, size up that data against what others in your field are offering. You should also ensure pay equity is in full effect within your organization.
- Determine what your employees value. Moreover, you must survey or otherwise “listen” to your people to learn what they value, benefits-wise. You don’t want to guess or assume when it comes to total rewards, although some organizations apparently do: a Willis Towers Watson study found that just 56 percent of organizations “get” what their employees value, in terms of existing total rewards. Contrast that with what 57 percent of employees say: before signing on with an organization, they must like the perks and benefits offered.
- Get buy–in from leaders. It’s imperative that your management team understands the importance of establishing a great total rewards strategy. In fact, they should champion your cause. The most effective way to get them on your side is showing them the relationship between an attractive rewards program and your organization’s ability to lure and keep talent, achieve heightened employee satisfaction, and improve organizational performance.
- Apprise your workforce. Once you’ve established priorities, it’s time to make your employees aware of what you’re doing, and why. They will appreciate that you’re involving them in the early phases, and they will be anticipating the changes.
- Assess the cost and impact of your rewards plan. It will be simple enough to run the numbers and figure out what your total rewards program will cost. Evaluating the effectiveness of the changes you make is a bit stickier. You’ll get a good idea by looking at employee absenteeism, satisfaction, engagement, and retention levels. Healthcare costs and organizational branding are good indicators as well.
Planning and implementing a total rewards system goes to the heart of your ability to remain competitive. If you need help reinventing your rewards strategy to help you recruit, motivate, and retain the talent you need, we recommend the leading health and benefits consultant Mercer.