5 Total Rewards Trends to Watch in 2022 (and what to do right now)
Last year saw one of the most unexpected Total Rewards trends in recent memory. Remote working, which employers had hastily adopted during the pandemic, suddenly became a must-have benefit for employees.
Instead of a Great Return to the office, we saw a Great Resignation. Remote working had allowed people to find a work-life balance that suited them. Suddenly, up to 39% of employees said that would rather quit than return to the daily commute.
It goes to show: Total Rewards really matters. If you're not familiar with the philosophy, Total Rewards is about looking at everything that people gain by working for your organization. That includes salary, benefits, and bonuses, but also includes less tangible rewards, like professional development and work-life balance.
A great rewards strategy can help you attract and retain the best staff. To get that strategy right, you need to know about some of the Total Rewards trends that lie ahead.
5 Important Total Rewards trends for 2022
2022 has already offered some tumultuous events: rising events the Omicron variant of COVID-19; confusion over federal vaccine mandates. These external factors have an impact on your employees, and that can affect their Total Rewards preferences.
Here's what you need to watch out for:
1. Salaries are under intense upward pressure
2021’s The Great Resignation saw many people change roles, or even switch to a new career entirely. This kind of movement in the labor market can often cause a spike in average salaries, as employees negotiate a raise from their new employer.
Inflation is also a major concern. 2021 ended with a record national inflation level of 7.0%. We may see more inflation later in the year if, as expected, the Fed increases interest rates. Macroeconomic changes will directly impact employees, who will need a salary increase in order to pay their bills. If you can’t offer that raise, they may look for an employer who can.
What to do right now: Use salary survey data to benchmark your current salary structure. Pay attention to economic news, especially news about inflation and interest rates.
2. Total Rewards is becoming a vital employee retention tool
Staff turnover is still a major concern, with 91% of HR leaders saying that they worry about losing employees. With high salaries and plenty of vacancies, even your most loyal team members might feel tempted to make a move.
The Total Rewards approach can help retain your best people – while also keeping your salary budget in check. By focusing on non-cash rewards like professional development, you can offer an outstanding employee experience. Get the balance right, and you'll find it easier to keep your best people.
What to do right now: Use surveys and focus groups to find out if the current employee experience is helping your retention strategy. Identify your main retention risks and talk to them about their Total Rewards.
3. Employees want more personalized rewards
Flexibility is the key to a great Total Rewards offering. Employees have unique needs, and they want an employer that will respond to those needs. This means going through all available benefits and vetting what's on offer to ensure that you're providing for every individual.
Remember, flexibility isn't just about open enrollment options. There's a huge demand for remote working, flexible hours, online learning support, and other rewards that offer meaningful value to employees.
What to do right now: Look at enrollment data to see which benefits are being used. Use pulse surveys to find out if employees are happy with the rewards on offer.
4. COVID continues to impact health benefits
Even if COVID were to disappear tomorrow, it would still impact health benefits for months to come. A substantial number of people are experiencing Long Covid, a debilitating condition that can cause extreme fatigue and brain fog for months. Those people will require care and support from employers.
Then there’s also the issue of deferred care. Many people were forced to defer elective or preventative procedures because of the pandemic, but those medical conditions haven’t gone away. Deferred care caused an estimated 6.3% increase in healthcare costs in 2021, and 2022 could be worse.
What to do: Encourage employees to reach out to HR if they are experiencing long-term health issues due to COVID or deferred care.
5. Work-life balance is the most important reward
A 2020 survey of workers with a healthy work-life balance found that most of them wouldn't change their schedule unless they were offered a substantial sum of money. On average, managers would have to offer these employees $10,000 extra before they agreed to a change of schedule.
Remote working has allowed many people to improve their overall work-life balance. And this will have a knock-on effect on employee retention, as people consider whether they want to focus on their career or their wellbeing. If you can offer both, you'll find it easier to keep your best people.
What to do now: Seek to organize a permanent remote or hybrid work schedule. Look for a balance that gives employees flexibility while also preserving your team culture.
Get ready for the Total Rewards trends of 2022
Helios HR has prepared a collection of free documents to help you navigate the road ahead. Check out:
- Workplace 2022: The Year Ahead in HR
- The HR Leader's Guide to Total Rewards
- The Helios HR Knowledgebase
Need some expert guidance? Get in touch today and book a no-obligation consultation call with an expert from Helios HR.