In a competitive labor market, employers must do everything they can to secure top talent. This means looking beyond salary and, instead, offering a holistic package that's tailored to each employee. This is the philosophy of Total Rewards.
How to Create the Best Total Rewards Package to Attract Key Talent
Have you reviewed what it is that specifically keeps your employees loyal to your organization?
Do you believe there are steps you, as the decision-maker of an organization, can take to offer your team members incentives that will excite and retain them over the years?
If you are a progressive leader, you may have worked to implement a robust total rewards package intentionally. If you haven't given it much thought yet, it's never too late!
You may be surprised by the impact a well-thought-out Total Rewards package can make on attracting and hiring top talent.
What is an Employee Total Rewards Package?
Total Rewards is a concept that describes all the tools available to an employer that may be used to attract, motivate and retain employees. To an employee or candidate seeking new employment, the notion of total rewards includes perceived value as a result of the employment relationship.
The top challenge our clients seem to have is usually around attracting and retaining talent. It's a candidate-driven market and coming up with ways to show your employees that they are valued at your organization is critical in the race to compete. The strategy of offering employees and prospective candidates a comprehensive total rewards package is one of the best ways to attract, engage and retain talent.
Recommended reading: How to Attract and Retain With Your Total Rewards Program for Employees
What is Included in an Employee Total Rewards Benefits Package?
An employee Total Rewards strategy example typically contains elements of salary or compensation, benefits, work-life flexibility, performance, recognition, and growth and development, which are all important components of the employee experience with your company. Below are a few general suggestions to consider when putting together a total rewards strategy:
1. COMPENSATION
In general, most employees regardless of title or role within the organization have an expectation regarding their salary. There are many compensation strategies that provide cash incentives and encourage retention. Following are ideas of pay that can be distributed in ongoing, short, and long-term increments.
- Fixed pay — Generally, this is the base pay (salary) offered to an employee. It usually is determined by the organization's pay philosophy and structure and should be competitive based on the economy and other organizations with similar positions.
- Variable pay — This is pay that varies and changes in accordance with the level of performance or results achieved. This is one-time payment such as a bonus, which must be re-established and re-earned each performance period.
- Short-term incentive pay — This is another form of variable pay. It is implemented as a way to focus and reward performance over a period of one-year or less.
- Long-term incentive pay — A form of variable pay, long-term incentive pay is designed to focus and reward performance over a period longer than one year. Typical forms include stock options, restricted stock, performance shares, performance units and cash.
2. BENEFITS
Health, dental and vision insurance along with retirement savings plans are usually the set standard for employee benefits. For many employers, it's a low and easy investment to also offer employees benefits like pre-paid legal, pet insurance, college savings plans, disability and life, an Employee Assistance Program (EAP), or wellness programs. The key is to offer above-average benefits if you want to stand out.
- Health and welfare (health, dental, vision, pre-tax benefits plans, life and disability insurance plans)
- Retirement options (up to a 6% match is the norm)
- Wellness programs (gym access, onsite wellness, fitness programs, etc.)
Since this article was first written, we are seeing employers get even more creative with their total rewards packages seven years later. With the COVID-19 pandemic in 2020, most employers are paying particular attention to the well-being of their teams and rolling out mental health resources in particular.
In addition to EAPs, some of our clients are providing counseling and subscriptions to mental health apps such as Ginger, HeadSpace, and Calm. At Helios, our team appreciates having a chair yoga break during our All Hands meeting and hearing our CEO encourage us to get up and go for a walk outside during the workday. That leads me to the next point...
3. WORK-LIFE FLEXIBILITY
Flexibility is highly important with all generations in the workplace today. With technology advancements, the reality is that employees are often working or accessible long after or before "core business hours". Leaders who understand and support the work-life integration concept and provide flexibility to their employees will advance in the talent market. Some examples include:
- Flexible schedules (compressed work weeks, modified schedules, etc.)
- Remote work
- Paid time off (including vacation, sick, sabbaticals, bereavement, etc.)
- Support to care for family members (including parental leave)
- Community volunteerism opportunities
The pandemic has dramatically changed our workplaces. The majority of employers shifted to a remote work environment and for those who couldn't implement a working-from-home situation due to the nature of their work, modified their work schedules. What was once considered a 'perk', is now the norm and a sought-after employee experience. Here are some other ways employers are offering paid leave and flexibility.
4. PERFORMANCE AND RECOGNITION
High-performing employees want feedback and recognition. Coaching employees throughout their time with you by setting goals and rewarding their accomplishments is a best practice. There is also great value in providing a platform for colleagues to recognize their peers. Here are some of the most common recognition programs we see:
- Goal-specific awards (quality, cost-savings, productivity, safety)
- An employee of the month/quarter awards
- Appreciation luncheons, outings, office parties
- Regular one-to-one meetings with employees and managers
- Performance reviews or goal-setting coaching conversations
In addition to offering the programs above, we also utilize GoodSeeker for peer-to-peer and client recognition at Helios.
5. GROWTH & DEVELOPMENT
Most high performers want to continue to grow and develop throughout their time with your organization. Whether you are helping them to grow as an individual within your career ladder framework, supporting their subject matter expertise, or encouraging their interests on a personal level, it is always appreciated by employees. Common programs include:
- Tuition reimbursement and/or student loan repayment
- Mentoring programs
- Training (job shadowing, classroom, paid courses, etc.)
- Access to senior leaders
- Leadership coaching
At Helios HR, we believe organizations should be intentional in offering a total rewards program to their valued employees. When employees feel supported by their organization, it becomes a win/win relationship. The investment translates into a more loyal, productive, and engaged employee. The monetary, as well as the non-monetary benefits, are designed to encourage growth and create a great employee experience with your company which will lead to long-term retention.
Did you find this article helpful? Here are some other articles you might find interesting:
- Employee Compensation vs. Total Rewards
- How to Best Leverage a Total Rewards Concept
- The Cost of NOT Formalizing your Tota Rewards Philosophy
- Incentive Program Design Review: A Client Success Story
Visit the following links for more ideas and suggestions on how to implement a total rewards program in your organization: