We all know that attracting top talent and retaining the best employees is vital for your business to grow and have long-term success. With everyone competing for top talent, it is important to make your organization stand out and appeal to the right employees. One way to do this is to design a robust total rewards program that attracts, retains, and motivates employees to do their best.
A total rewards program refers to the complete package of both monetary and non-monetary compensation and benefits that an organization can offer to their employees in exchange for their skills, expertise, and contributions. Some incentives that you can offer employees include competitive compensation, career growth opportunities, benefits, work-life balance, and a positive work environment.
Benefits of Building a Total Rewards Compensation Package
Providing a competitive total rewards package heavily influences whether a potential employee takes the job or not. Building a robust total rewards package has many benefits:
- Attract highly qualified employees: When an employee decides whether to accept a new job, they look not only at compensation, but also at the benefits, development, and work environment offered. A total rewards package that meets the needs of employees will appeal to a broader demographic and lead you to the right hire.
- Stay competitive: A robust total rewards package makes organizations more competitive within their industry, allowing them to find the best employees.
- Cultivate a positive and engaged workplace: An effective total rewards package enables an organization to improve business performance by building a motivated and engaged workforce. Employees are more likely to stay long-term and do more for the company if they feel like they are recognized and valued.
- Reduce recruitment and training costs: The more robust your rewards package is, the more you can attract highly qualified employees, reducing the need for additional recruitment efforts and initial training.
- Maintain a high employee retention rate: With careful planning, an effective total compensation package can reduce turnover. When a compensation package is up to an employee’s standards, the employee is more likely to stay at the company longer.
- Remain flexible: One benefit of building your own rewards program is that it can be completely customized to your organization’s needs, and benefits can vary depending on employees. For instance, earning a commission does not apply to all roles. Usually someone on the sales team may earn commission if they make a sale.
What to Include in Your Total Rewards Package
An employee total rewards package is the combination of both monetary and non-monetary compensation and benefits. Customize the package based on your organization’s goals and employee’s needs. It can include a combination of the following:
Benefits
According to the Affordable Care Act, if you are an employer with more than 50 or more full-time employees, including full-time equivalent employees, you are required to provide health insurance. While health insurance is the most popular benefit, providing a range of benefits is an effective way to retain employees.
- Dental Insurance
- Vision Insurance
- Life Insurance
- Paid Time Off
- Disability Insurance
- Employee Assistance Program
- Paternal/Maternal Leave
- Health Reimbursement Arrangement (HRA)
Perks
Since the pandemic, people are seeking job opportunities that have a good work-life balance. Including perks such as flexible schedules, remote work options, or more unique perks, such as employee discounts and free meals, will attract more candidates and encourage motivated employees.
- Flexible Work Schedule
- Work-from-Home Options
- Employee Discounts
- Wellness Programs
- Gym Membership
- Free Snacks or Meals
- Pet Insurance
- Daycare
- Ergonomic Workstations
Recognition and Rewards
Employees want to feel valued and appreciated. Providing awards and employee recognition programs that fit your organization can be an effective way to give back to your employees.
- Employee of the Month
- Performance Awards
- Long-Service Awards
- Promotions
- Verbal Appreciation
Non-Monetary Compensation
Providing opportunities for employees to gain professional growth through continued education and proper training is a valuable way to grow the company. Employees can learn current trends and best practices that can help the company succeed.
- Training and Development
- Career Growth Opportunities
Implement a Total Rewards Strategy
1. Assess Your Organization’s Needs
Before designing a total rewards program, you need to understand your organization’s goals and objectives. Conduct a comprehensive analysis to identify key factors, such as business goals, industry benchmarks, employee demographics, budget, and competitor practices. To streamline the compensation portion of your program planning, ERI can help you properly set base pay, bonuses, and commissions, as well as analyze pay equity, all within our Assessor Platform.
2. Conduct Stay Interviews and Gather Employee Feedback
Conduct stay interviews or employee engagement surveys to understand employees’ needs and increase retention. Discuss with your employees all areas of your total rewards package, including compensation, benefits, development, and work environment. Develop questions that will help you understand what will help your employees stay motivated and engaged.
3. Design a Total Rewards Strategy
Once you know your goals and gather feedback, it is time to evaluate your current benefits and rewards program to help create a total rewards strategy. Find out what is currently working and what is not to allow areas of improvement. When deciding which benefits to include in your total rewards package, consider your budget, goals, and employee’s needs. Ensure that your total rewards strategy has good ROI over the long term, but also keep in mind that you can update your strategy as needed.
4. Communication and Education
After developing the total rewards program, execute a comprehensive communication plan to educate managers and employees about the program’s components, their value, and how they can be utilized. Use multiple channels, such as town hall meetings, intranet portals, and personalized benefit statements, to ensure maximum reach and engagement.
5. Ongoing Success and Evaluation
To ensure that your total rewards program has lasting success, set key performance indicators (KPIs) aligned with your program objectives and regularly assess and evaluate their impact. You can monitor metrics, such as employee satisfaction, turnover rates, productivity, and overall organizational performance, to gauge the program’s success and identify areas for future improvement.
Why Use ERI in Your Total Rewards Strategy?
Designing a robust total rewards program can seem daunting, but it is important in the process of attracting, motivating, and retaining top talent. By understanding the concept of total rewards, aligning them with organizational needs, and leveraging ERI’s compensation planning software, you can create an effective program for your organization. To streamline the compensation portion of your program planning, we can help you properly set base pay, merit increases, and incentives, as well as evaluate pay equity, using ERI’s Assessor Platform.
