As employers are becoming more mindful and concerned about how to recruit and retain a high-performing workforce in a competitive recruiting landscape while maintaining costs, building a total rewards compensation and benefits package is becoming increasingly more important. The concept of a total rewards package is not necessarily new, but employers are starting to do a better job of communicating the “hidden paycheck” behind their employees’ full compensation package.
While the gross earnings on an employees’ weekly, biweekly, or monthly paycheck stub only include their salary, there is typically a relatively substantial amount in addition to that number that includes their health benefits and other value-added benefits such as paid time off, wellness programs, retirement contributions, and other incentives.
Total rewards packages offer monetary and non-monetary rewards to employees. Some of the incentives that have a hard-dollar or perceived value in the employment relationship include:
Base and variable pay
Insurance to include medical, dental, and life
Paid time off (PTO)
Training and career development opportunities
These benefits and incentives are interdependent and may be valued differently by each employee. Ultimately, the outcome of a total rewards approach is to provide each individual with a combination of monetary and non-monetary rewards, serving as a motivating tool to increase retention and maintain desired business performance.
According to the Total Rewards Practices Survey conducted by Deloitte, only 24% of large organizations and 16% of small organizations have integrated a total rewards system into their business model, so if your organization has not executed this idea, you’re not alone. However, if you and your leadership team decide to put this idea into practice, it could give you quite a competitive advantage.
Remaining competitive in today’s marketplace is a top business concern for 34% of employers, and by simply communicating your employees’ total compensation package, you could find that they have a better understanding of their overall value and your commitment to their wellbeing. Consistently communicate to your employees the incentives your organization offers and how they can take advantage of the rewards in their unique circumstances.
How to Develop and Implement a Total Rewards Program
To create a valuable total rewards program, consider putting together a team that can assess your current benefits package relative to your company’s goals. If you discover that your current rewards system does not help you meet company objectives, implementing or enhancing a total rewards program could be a productive strategy. Here are four steps to developing a concrete program:
Ask your management team to identify and analyze numerous rewards strategies and evaluate what would best suit your unique workplace. Some things to consider:
Once your program is established and implemented, publicize it to your employees with a strategic rollout plan.
Educate and train employees on how they can fully leverage the program and the rewards and tools that are at their disposal.
Regularly review the program’s effectiveness and make adjustments as needed.
While completely avoiding turnover is not a realistic goal, implementing a total rewards program that clearly communicates to your employees the total value of their compensation package, could go a long way in helping your employees understand how much your company values them, and potentially reduce the turnover rate your business experiences.
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