Are Total Reward Statements still fit for purpose?
In today’s dynamic work environment, where people move jobs more often and are more aware than ever of their worth, it is crucial for employers to ensure employees understand the total value of their compensation and benefits package.
But that doesn't make the case for the Total Reward Statement (TRS) in its current format.
One significant flaw lies in the way traditional TRSs are presented. Too often they are bland, itemised lists that primarily focus on highlighting how much an employee costs the business.
This approach fails to resonate with employees on an emotional level or have any practical application in helping them extract value from that offer.
While a TRS can provide useful information for employees negotiating a new job or managing their taxes, there is the need for a more compelling document that compel people to engage with them.
It shouldn’t be a statement
A Total Reward Statement should be renamed a Total Value Prospectus (TVP). Not only is it about the ‘value’ employers are providing their employees, which is more expansive than ‘Reward’, it isn’t a statement, like a bank statement, but a marketing tool, to ensure employees connect with the value therein.
When we consider a TVP (as opposed to TRS) in this way, the focus is less on the cost of benefits and the amount of compensation and more on how employees can use them to help manage their financial and health wellbeing.
The approach should provide information and aspiration in equal measure, together with clear ‘calls to action’, to help employees extract maximum value from what the company provides.
A TVP can also then act as a mechanism for attracting new employees, as it is more of a cultural statement about how the business wants to support employees, rather than an uninspiring, detached table of numbers.
Think beyond the list
Delivering a TVP comes down to several factors, including the size and budget of the organisation, the use of benefits technology and how your people best engage with work-related content.
For some, a TVP can be an addition or integration to a benefits platform, with some synergies and efficiencies in the use of data – so long as it isn’t just going to produce that itemised cost summary.
For others, it may be a digital asset (like a brochure), which still provides a personalised summary of the levels and costs of each component of compensation and benefits, but which can also then embed video, audio, document links, website links and so much more, to bring the experience to life.
It comes down to this simple fact – as per our 2023 Benefits Design Research in conjunction with REBA: only 9% of reward professionals think they are delivering benefits communications well.
If you are in the 91%, then at least the idea highlighted above, if not the exact execution, should put you on a path to better communicating the value of your benefits proposition and getting some form of return on investment.
At Howden, we work with leading employers to help them provide exceptional benefits communication, including TVPs. We understand the importance of effectively communicating the true value of benefits to employees and can help employers achieve this goal.
In partnership with Howden Employee Benefits
Howden provides insurance broking, risk management and claims consulting services, globally. We work with clients of all sizes to provide dedicated employee benefits & wellbeing consultancy.