Why total reward statements need to change or risk becoming irrelevant
Total Reward Statements (TRS) are widely assumed to be a positive force in reward strategies. In theory, they help employees understand the full value of their pay and benefits and, in doing so, drive engagement, appreciation and retention. Yet evidence increasingly suggests that this promise is rarely realised in practice.
The latest REBA research into the governance of benefits programmes highlights a fundamental issue: many TRS have become static, retrospective artefacts that exist largely for compliance or reassurance, rather than as tools that actively support employee decision-making or business outcomes.
If reward teams are serious about driving measurable impact, Total Reward Statements need a fundamental rethink — from what they are, to what they are designed to do.
What would give TRS a new lease of life?
TRS and flexible benefits often go hand-in-hand and that provides a starting point for re-thinking the approach. And, just as when personal situations change, benefits come to the fore, so when compensation changes, that is most likely the time when employees think about the “so what?”.
Total Reward Statements should be more than just statements; they should be part of the process of helping employees solve their problems and achieve their goals. Although the data in them may be relatively static, engaging employees with them should be a dynamic process, based on changes in their compensation, changes in their circumstances and changes in tax.
This requires a platform and supporting processes that deliver timely notifications, education, and guidance tailored to each employee’s circumstances, starting with their TRS as the first port of call. From there, the TRS should prompt relevant actions: a significant salary increase may signal it’s time to review pension contributions; a new addition to the family could trigger guidance on adjusting healthcare and life cover.
The focus shifts away from “what do I get?” towards “what should I do with it?”— empowering employees to make informed, proactive decisions about their benefits.
And that doesn’t stop at flexible benefits. It can and should point employees to other resources and services outside of the benefits that can support their goals, such as access to financial and mortgage advice. The mindset should be helping the employee understand their reward and how they convert it into assets/wealth.
TRS value comes from helping employees make better decisions about their finances, not simply seeing their cost to the business.
More on the strategic and data driven approach
There’s a simple principle at play here: do the thing that leads to the outcome you want. And it applies to employers too.
Total Reward Statements shouldn’t be done because they are nice to have, or because they are perceived as necessary. The process only adds value if it’s driving the desired outcome. This is where metrics become important because data will help demystify this.
Whether you have TRS today or are thinking of implementing it, you need to start with the goal in mind and work backwards through the data you need to validate the value of your approach.
Much of that will fall into two categories:
- What employees are doing: Are they visiting TRS and what action are they taking as a result?
- How are employees feeling: Do they feel better rewarded and/or that reward and benefits are helping them solve their problems?
That will require platform engagement data and employee sentiment (survey) data. But remember, no initiative is an island – perceptions of reward are based most on how well rewarded employees are. If people see TRS more, but appreciate their reward less, know what that would mean for the Reward function and the business too.
Ultimately, the value of Total Reward Statements is not created by showing employees what their reward costs the organisation. It comes from helping them make better decisions about their finances, their benefits and their future.
When TRS are designed around real employee use cases, embedded into the workflow of reward, and supported by data that proves they are driving the right outcomes, they can become a powerful strategic asset. But in their current form — often static, incomplete and disconnected from action — they are unlikely to stand up to increased scrutiny from Reward teams focused on evidence-based decision-making.
The implication is clear. TRS should not exist because they are familiar or expected. They should exist because they demonstrably help employees and the business achieve better outcomes. If they cannot do that, it is time for change.
Supplied by REBA Associate Member, 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.
