You’ve likely invested a great deal of money and time into your total rewards program. Now you need to ensure that investment is maximized to stay ahead of the competition. This article outlines the four steps your organization can take to do so.
STEP 1 – TAKE INVENTORY
Compensation – Benchmarking is critical. Employers must understand how all of their jobs stack up against the competition. Is your base pay market competitive? Are your incentives competitive?
Benefits – It’s also essential to benchmark your benefits against your competitors. Take a comprehensive look at all of the benefits you offer so you can ensure your employees are aware of those benefits, understand those benefits and understand their value. Also, an inventory is an opportunity to assess if your offerings fit the current needs of your employee population. Following are the most common benefits offered:
- Health Savings Account (HSA)
- Flexible Spending Account (FSA)
- Employee Assistance Program (EAP)
- Care Delivery Options
Additionally, explore what options might be available through your existing partners. There are often very valuable resources to support employee wellbeing that are not advertised by your vendors. For example, many 401(k) providers offer some excellent financial wellbeing resources, such as free customized webinars, one-on-one financial coaching, and online platforms with financial calculators for budgeting, retirement savings, paying off student loans and more.
Employee Experience – Taking inventory of the employee experience can be challenging. However, the following four categories will give you a solid foundation to build from:
- Growth & Development
- Mentorship programs
- Cost-sharing for education
- Career pathing
- Team Building & Social Opportunities
- Employee resource/social groups (e.g., women’s group, diversity & inclusion group, book club)
- Philanthropic opportunities (e.g., PTO to volunteer)
- Recognition programs
- Formal team-building events
- Physical Workspace
- Ergonomic workstations, sit-stand desks
- Gym equipment, yoga classes
- Health food
- Pleasant environment (e.g., plants, art, natural light)
- Flexible work arrangements/schedules
- Parental leave
- Bereavement leave
STEP 2 – MAKE ADJUSTMENTS
Key Considerations for Making Adjustments – There are a number of questions that employers need to ask themselves regarding their inventory.
1. Does this align with our strategic priorities?
Thinking about compensation philosophy, for example, do we want to be leaders in the market where we’re looking to hire top talent and willing to pay for it? Maybe that differs for different departments, divisions, critical jobs, etc. So it’s important to think about not only what the external data says but also how does this impact who we are as an organization?
2. Do employees value it?
HR, the CFO, the CEO and consultants can make recommendations, but if employees don’t value their rewards, it may all be for not. Through a cohort analysis you can understand what employees place value on and how much they value those things. Then compare that to costs and make adjustments accordingly.
3. Does it make financial sense?
The investment in total rewards is a significant cost in any organization. It comes down to how to best allocate those dollars.
4. Are there gaps to be filled?
As you went through your holistic total rewards, where did you find gaps? Further, would it be beneficial to the employees and the organization to fill those gaps?
Filling Gaps in Total Rewards – Once you’ve answered these questions and identified gaps, it might seem a bit overwhelming to cut back and/or make additions. There are more specific questions you can delve into to help you prioritize your next steps.
1. What are our competitors offering that we should consider adding in order to not lose top talent to them?
For example, assume that your competitor is offering very similar compensation and benefits. You’d want to look at the employee experience to see what you can do to improve in that area and gain the competitive edge.
2. What would your employees say is the most important thing you can do to improve their daily work experience?
This will vary based on your employee population. For example, is it a mostly young, active group? Maybe consider putting in a basketball court. Are your employees parents with children living at home? You may want to add flexible work arrangements or child care benefits.
3. Three years from now you are recognized as an employer of choice. What was the catalyst for change this year?
While this may take years to achieve, decide what steps you can take today to improve your total rewards package and get you one step closer to that goal.
STEP 3 – COMMUNICATE THOUGHTFULLY
Create an Effective Total Rewards Communication Plan – Your communication strategy doesn’t have to be complicated. It breaks down to the following six components:
- Catering to the audience
- Short, digestible content
- Multi-media channels
- Proactive timeline & planning
- Resource inventory
- Data analytics
Utilize Accessible Technology Solutions
- Website (make sure it’s mobile friendly)
- Instant messaging tools
- Mobile – text, apps
- Benefits FAQ
- Decision-support tools
- Virtual benefits fair
STEP 4 – MEASURE RESULTS
Quantitative – CFOs (among others) expect to see tangible results. Therefore, it’s important to compile as much quantitative data as possible. The following are various methods you can employ.
Qualitative – Some components of the employee experience are captured in the quantitative analysis, for example, use of PTO, volunteer hours and employee retention. However, others can be difficult to attach numbers to. This is when you can take measure through qualitative means. The following are a few ideas:
- Customized employee experience surveys to gauge components such as the quality of workplace relationships with peers and supervisors, perceptions of leadership, and sense of purpose in their role
- Employee engagement and satisfaction surveys
- Employee net promoter score, which measures how likely your employees are to recommend you as a place of employment to a friend or loved one
- Focus groups
- Observational methods