Employee Wellbeing, Rewards & Recognition | Article

3 Essential Elements of a Total Rewards Package

The right total rewards package can bind employees to your organization. If it falls short, your recruiting and retention may start unraveling.

Employees aren’t afraid to quit when they are unsatisfied. There is a lot that goes into employee satisfaction beyond pay and basic benefits. That’s why it’s called “total” rewards after all!

Here are a few elements to consider when finding a combination of benefits that will satisfy your people:

1. Strong Foundation

Before you add a bunch of fancy new things to your total rewards package, you need to look at the base. Compensation and benefits provide the strong foundation required to start fulfilling employees’ higher needs. Begin by looking at:

  • Direct compensation, including incentives and variables models (i.e. bonuses and overtime pay)
  • Benefits such as health insurance, educational stipends, and paid time off
  • Performance management style and strategies

Determining compensation and benefits can be complex. Especially now with layoffs, high turnover, and inflation. Building a solid plan within the budget that also meets the expectations of employees can be a big challenge. Raises may fall short since inflation rates mean employees’ salaries aren’t going as far as they used to.

To set yourself up for success, stay up to date on reliable data from reputable sources. This will help you remain competitive with compensation and benefits. Utilize data that reflects your region and industry.

2. Holistic Experience

What employees need and want from their jobs is shifting. In the past, employment relationships were solely transactional. People came to work for nothing more than paychecks and insurance. Today, workers expect experiential components and emotional ties.

Experiential components include growth (career development opportunities) and wellness (mental health benefits). Employees want to know that their employers care about them as humans. Beyond performance and numbers, prioritize the overall wellbeing of your people.

The next level is purpose. Employees want to feel emotionally connected to their work in some way. This might mean:

  • Connecting to the organization’s mission
  • Feeling like their job makes a difference
  • Valuing the organization’s community efforts (i.e. sustainable operations or charitable donations)

It’s powerful when employees take pride in both the work they do and the company they work for. In fact, employees who feel proud to work at a company are 6 times more likely to endorse their workplace and twice as likely to stay for a long time.

3. Flexibility

Remain fluid and responsive to changes in your industry and the world in general. The pandemic is an example of the way many organizations had to shift – in this case, to flexible working arrangements. This benefit has remained intact and will likely continue to be demanded by employees. Additional considerations companies have made are:

  • Increasing access to wellness services such as gym memberships reimbursements and visits with mental health professionals
  • Adopting four-day work weeks or non-traditional working hours
  • Introducing pay-on-demand options, granting immediate access to earned wages
  • Adopting unlimited PTO policies
  • Allowing sabbaticals

One size doesn’t fit all. A benefit that makes sense for one company may not make sense for another. Even within individual organizations or teams, needs can vary a lot. So ensure you cover a wide range of needs and desires.

Building a robust total rewards package only matters if people understand the full value and put it to use. Employees may not realize everything an employer is paying on their behalf besides their base salary. Form a total compensation statement highlighting the monetary value of each benefit. Communicate through multiple channels frequently so your employees can become very familiar with their benefits. And, of course, ask for input. Listening and implementing feedback will help you create a total rewards package that employees love!