Embracing the total rewards concept
Two recent MRA Hot Topic Surveys indicated that while competitive pay and employer-sponsored health insurance remain two of the most valued employee benefits, employers are thinking outside of the box to seal the deal when it comes to attracting, retaining, and rewarding employees. Here's what some companies are offering:
• Paying entire premiums for health, dental, and vision coverage
• Flexible work hours (and early close on Fridays)
• Extra PTO for community service
• Repayment or forgiveness of student loans.
• Additional money -- in fact, more than 50 percent reported that they will pay up to 10 percent above market to attract top performers. Some will even go higher.
However, a benefit that the recipient doesn't see as a benefit is not a benefit. Employers need to be aware of the vast difference in benefits preferred by people at different stages of their life, and the opportunity to differentiate your organization with leading edge benefits tailored to your culture and talent strategy. Benefits that 25-year-old millennials are looking for might include assistance with student loans, flexible/remote work options, and more of a focus on their work culture. A 40-year-old with children may favor mortgage assistance, college-savings programs, and want affordable health care. And, 65-year-old Baby Boomers might be most interested in a phased-in retirement, flexible schedules or workplaces, and reduced workloads.
With these varying demographics in the workplace, limiting an organization's rewards program to pay and benefits alone is no longer enough. A "one size fits all" approach no longer works. Today, the concept of "total rewards" has more critical importance to recruit, retain and reward all employees. Total rewards can be defined as anything the employer offers in return for their employees' engagement, commitment and contribution. Rewards generally fall into four categories:
• Compensation -- base salary, incentive/variable pay, and recognition
• Benefits -- health care, other group benefits, retirement, work/life programs, PTO, and wellness
• Individual Growth/Personal Development -- advancement or lateral career opportunities, career development, performance management and support, succession planning, compelling future, awards, diverse team, and training
• Work Experience/Environment -- the work itself, organizational image, leadership, organizational policies, work/life flexibility, culture, support of community and environment, and affiliation
Individual growth and work environment are receiving a great deal of attention these days as employers focus on enhancing their attractiveness as a preferred place of employment. Employees want meaningful work, high (but fair) standards, and a clear sense of purpose and direction. Specific strategies to provide these experiences include job enrichment, focusing on challenges, increasing employee autonomy, directly connecting the employee into the mission of the organization, and providing appropriate feedback.
Employers of choice are embracing the total rewards concept. They are closely evaluating their formal and informal rewards program and repackaging their offerings into a comprehensive, flexible, and attractive rewards system. MRA's Total Compensation Statements are an easy way for employers to communicate to employees the value of all forms of compensation provided. Total rewards will be a mission-critical strategy for the future success of organizations.
• Deb Schultz, GPHR, SPHR, SHRM-SCP is the Director, Total Rewards at MRA -- The Management Association. Visit www.mranet.org or follow MRA on LinkedIn, Facebook: http://facebook.com/MRAmeansHR, or Twitter: @MRA_HR_Pros.