Need to know:
- Money is no longer the deal-breaker when it comes to hiring and keeping talent. Post-pandemic, employees are seeking a more holistic rewards package.
- A total rewards strategy must align to a firm’s unique strategic objectives and the broader employee experience.
- All areas of benefits can and should be promoted, and can often include the promotion of the overarching employee experience itself.
- A multi-dimensional approach to communicating total rewards is critical to capturing the emotional response, and the social and career elements.
Covid-19 (Coronavirus) has had a devastating effect on the world of business, but it has also had an impact on reward, depressing it via furlough, pay freezes or pay cuts, and low or no incentive payments. Now, as they emerge from the crisis and start focusing on growth, organisations across many industry sectors are facing severe staff shortages, and are having to work that much harder to attract and retain the skills they need.
For many years employers have taken a total reward approach to talent acquisition, using detailed breakdowns of their compensation and benefits package designed to raise employees’ awareness and appreciation of the rewards offered.
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Pay may still be a primary driver of attraction and retention, but it isn’t always the answer, and the impact of the pandemic has left many people re-evaluating how they work and what their priorities are. Increasingly they are looking for a more holistic package that includes more time off and greater flexibility.
Changes to benefits
A Willis Towers Watson survey carried out in May 2020 found that two-fifths (42%) of organisations have made, or are planning to make, significant changes to their benefit programmes as a result of the pandemic and the impact it has had on the way that people work.
Many industry experts believe that a total reward approach can still prove effective in securing talent, but as Jeff Fox, principal at Aon, points out, this is only as long as employers take steps to review whether what they are currently doing is fit for purpose.
“Total reward is most effective when it is aligned to organisational priorities,” he says. “In our 2021 Total reward survey, attracting and retaining the right talent was the top priority for most participants this year, reflecting the return of the ‘war for talent’. In our last survey in 2016, attraction and retention were ranked as priorities seven and five respectively. The agenda has clearly changed.”
At its best, total reward can help to enhance an employer’s talent strategy, and ensuring that the two are in sync will help businesses to attract and retain the best talent for them, and improve employee engagement. If a key goal for a business is to retain top performers or high-potential talent, total rewards can help achieve this objective through competitive packages and effective communication.
Anything and everything should be considered part of a total reward strategy. A total reward statement (TRS) is no longer a total financial statement, but a total value statement, and recognising this shift is crucial to its success, not just in terms of deciding what to include in the offering, but also the style in which it is presented to employees, as Matthew Gregson, director and head of corporate at Howden Employee Benefits and Wellbeing, explains.
He says: “Having a framework for total reward that encompasses everything relating to the employee value proposition (EVP) outside of reward, such as leadership and development, HR policies, and corporate social responsibility (CSR) approach, ensures that the message about the type of employer you are and the value of working for you gets across as clearly as possible. Delivery of total reward is less about a table or schedule of costs and more about providing content, inspiration, and education about everything employees value; think more ‘digital magazine’ than ‘bank statement’.”
Reinforcing everything that the organisation does for the employee can be critical in proving value beyond just basic salary. This doesn’t just mean the financial reward elements that a cost can be attributed to, but also means the cultural and elements of reward that contribute to an organisation being a great place to work.
Alex Williamson, co-founder and CEO of Impactful, says: “Our research into employee needs has revealed a strong desire for more than just a pay packet. Today they want to feel that the [organisation] they are a part of doesn’t just share their values, but offers them a chance to explore and connect further with them.”
Examples might include giving staff time to volunteer for charities or good causes on the organisation’s time or matching payroll donations. “By incorporating culture and values into the total rewards package, [an organisation] can stand out as a purpose-driven company that is different from competitors, which can play a huge part in securing talent in a competitive market,” adds Williamson.
Effective communication of total reward offering is crucial and this should include increasing the frequency of communications beyond annual the TRS. It should also reflect the new employee experience which thrives on transparency, personalisation, and digital access to relevant information, platforms and processes.
Employers will need to provide more holistic views of what the overall rewarding experience is like working for an organisation. The traditional TRS is likely to evolve to include much more in the statement with non-traditional benefits, such as remote or hybrid working, appearing alongside salary, pension and benefits.
Most total reward strategies continue to focus on financial and physical dimensions, but Fox insists that thinking holistically is key, and says that a cross-dimensional approach is critical to capture the emotional response, and well as the social and career dimensions.
“This is where technology can help facilitate greater insights on how effectively total reward is being communicated,” he says. “A combination of employee listening and engagement metrics, including page views, videos watched, app clicks, can all help businesses build a picture of both how engaged employees are with total reward, but also how they feel about their value and compensation.”