What employees want from employers has changed — a change accelerated by Covid. Now employees expect salaries and benefits that truly reflect the value they bring to the table, which sounds fair enough!
A well-thought-out rewards strategy can help you meet or surpass these new expectations. But you need a rewards strategy that delivers fair and consistent rewards empowering employees and supercharging business growth.
This blog shares insightful tidbits from our recent webinar about how you can create this all-singing, all-dancing rewards strategy.
Here’s who features in our webinar:
Mona Akiki, Chief People Officer @ Perkbox
Alex Bertin, Sr Manager of Compensation @ BambooHR
Sophie Matthews, People Manager @ PayFit
We’ve got a lot to get through so let’s dive in!
Table of content
Why is a total rewards strategy suddenly a “hot topic”?
Having a reward strategy isn’t a brand new concept, but with the world of work changing in recent years, what it should look like has also transformed. Employees now have higher expectations about what they want from their employers, so how we craft and implement a reward strategy has never mattered more than today.
Perkbox found that 45% of employees expect employers to provide benefits alongside their salary. But we’re not talking about additional monetary incentives. Instead, the focus is on delivering rewards and benefits in line with the employee’s lifestyle. If you don’t meet these expectations, employees will move jobs in search of better benefits and support.
So the pressure is on HR teams to attract and retain talent, but what’s actually in it for employers? LinkedIn research found that companies that rated highly on rewards saw 50% lower attrition than those that didn’t.
If that’s not enough to get you excited to build a rewards strategy — we don’t know what is!
How can a total rewards strategy benefit your organisation?
Aside from lower attrition, most businesses strive for better employee engagement and stronger talent, and a rewards strategy can help you do just that. Historically, salary is the focus for many companies, and while that’s important, it’s not the be-all and end-all.
(P.S. If you’re looking to benchmark your salaries but don’t have a big budget, Alex recommends checking out pave.com. A free resource you can connect to your HR system.)
Many small businesses create a compensation and benefits strategy they’ve poured all their energy into for some parts not to be utilised at all. To stop this happening and to derive real value from your strategy, you need to create one that actually delivers results while pleasing employees, says Sophie.
With pleasing employees in mind, organisations need to take a more holistic approach to benefits — find out what’s important to them to make the rewards system work for your business — a system that helps you achieve your objectives.
As a result of changing their approach to their total rewards strategy, BambooHR has witnessed many benefits — improved retention and a better calibre of talent through the door, being two of them.
So, where do you start when creating your strategy?
3 tips for building your total reward strategy
Here are some tips from the experts.
Tie everything back to your mission
You need to work with your leadership team to ensure there’s a strong mission in place, says Alex. The BambooHR mission is to set people free to do great work, so everything ties back to that mission when building the rewards strategy.
Alex says it’s taken the BambooHR team six months to decide on their three-year goals, but now that they’re equipped with crystal clear business objectives, they can identify what they need to do to achieve them. Which, in this case, is by attracting a specific talent profile, so they have to start by asking — “how will we achieve this?”
Throughout the process, it's essential to think through every detail, from what rewards need to be in place to attract the talent to how competitive they need to be in the market and whether a short-term bonus program is a good idea to achieve this.
After deciding what your organisation wants to achieve, it’s about putting those processes and practices in place to accomplish those outcomes.
Get leadership and employee buy-in
If you implement rewards that aren’t relevant to your employees, you may as well not have bothered. So getting them onboard and understanding what they want from you as an employer is key to making this work.
In the same vein, you need leadership buy-in because these leaders will be the ones having conversations with employees daily — they will be communicating the rewards strategy. So if they don’t understand it, you become a little stuck.
Conducting internal research with both leadership and employees is critical to the success of your rewards strategy. Take the time to ask what’s important to employees. After completing this process themselves, Mona says Perkbox now understands it's crucial to provide choice and lots of flexibility when it comes to benefits and rewards.
It’s about simply finding out what employees want and offering a solution that benefits everyone.
Don’t forget to conduct external research
Although internal research is crucial to determining a rewards strategy that delivers value, external research also has a vital role to play. Your total rewards strategy has to align with the market, says Sophie.
But only aligning with the market will mean you’re not focusing on identifying what’s unique and important to you based on the business objectives. So it should be a 50-50 balance.
You want to ask yourself questions like, "where do our competitors sit with things?" For example, BambooHR offers an equity programme to attract and retain talent, enabling them to add further value to the company. But offering benefits like this requires external benchmarking, says Alex.
Mona suggests that networking with other HRs in different industries can provide real insight and give companies a different perspective when building their rewards strategy. In retail and manufacturing industries, for example, they couldn’t simply work from home during the pandemic, so instead, they had to think differently about rewards and benefits, i.e. offering flexibility with shift work.