The future of total reward: eight key insights
Most companies want to maintain a competitive advantage over their rivals and this should extend to considerations of reward too. Employees’ expectations have changed with the increasing dominance of Generation Y and Z in the workforce. These employees are more entrepreneurial; they demand flexible and innovative arrangements from their work and are less committed to one employer over the long term.
Companies need to reflect this shift in emphasis, and one way of doing that is by offering a total reward package. Total reward is all about looking at the big picture; looking at everything employees would value about working for your business.
The future of total reward lies in getting the right mix of the following eight elements. How should your organisation fit them together to appeal to your current and potential employees in a much broader way? Getting that magic combination will make you stand out as an employer of choice, meaning you have the best chance of attracting and retaining talent in a fast-paced and competitive marketplace.
1. The pay. Is the pay you offer fair within your organisation and competitive compared to others? Is it enough to suit the skills and experience required to do the job?
2. The benefits. You might have a huge list or a fine-tuned selection, but is the choice of benefits available relevant to and valued by employees?
3. The recognition. This is key to making employees feel valued and appreciated, and therefore engaged. Whether it’s a thank you, extra time off or a gift for going above and beyond, are your employees recognised by managers in your business?
4. The work. Do employees find the work they do interesting, challenging and rewarding? Can they develop new skills and experience that they, and you, value?
5. The development and progression. A sense of achievement and personal development is important to most. Do your employees understand how they can progress within the business? Do they have access to education and training – work related or not?
6. The working arrangements. Some employees may prefer to come to work, go home and switch off at the end of the day. Some may prefer more control over where and when they work. Can you provide options for flexibility or agile working alongside set hours?
7. The culture. The working environment should reflect the type of people you want to attract. You may have a creative, buzzy workplace or calm and peaceful environment, but does it suit your employees? Is it conducive to the type of work they do?
8. The communication. All of the above means nothing if your employees don’t feel respected and listened to on a day-to-day basis. Do you talk to your employees as adults? Does everyone have an opportunity to contribute?
Total reward in action
Here’s a few examples of how some companies are changing the way they look at total reward. The ideas aren’t right for everyone, but what these companies have done is think about what’s valuable to their employees and developed meaningful processes and rewards that suit different demographics and work for the business:
- Pinterest provides a unique take on the parental-leave policy by offering three paid months off, plus a month of part-time hours, as well as two counselling sessions to create a plan to re-enter the workplace.
- LinkedIn emphasises self-development by giving every employee one day a month to ‘transform themselves, the company or the community’.
- Deloitte offers two sabbatical programmes: an unpaid, one-month sabbatical that can be taken for any reason, and a three- to six-month sabbatical that can be taken to pursue personal or professional growth opportunities with 40 per cent pay.
- Some businesses want their employees to gain the benefit of the product or experience they’re selling to customers. For example, Airbnb gives its employees an annual stipend of $2,000 to travel and stay in an Airbnb listing anywhere in the world.
Total reward matters and your approach to it needs to adapt to fit with the world we live in now. Social, political and technological changes have changed the way we’re living and working and it’s important that your business keeps up with these.
Your total reward perspective should reflect your organisation’s DNA, values and purpose, and needs to be fair, ethical and workable for the business and your employees.
The author is Justine Woolf, client director at Innecto Reward Consulting.
This article was provided by Innecto Reward Consulting.
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