Your people are your biggest investment. As an HR or Total Rewards professional, perhaps no duty is more important than attracting and retaining the right people. Your organization represents just one of millions. What you choose to offer your people is what makes you stand out among the crowd.
Offering What Matters Most
The concept of total rewards represents our answer to the employee’s question, What’s in it for me? It includes all the rewards given in exchange for the knowledge, skills, and abilities employees use to perform their job. These rewards comprise the employee value proposition (EVP)–the things that attract and retain your people.
In seeking to design the most compelling EVP, we need to know what employees value most. Research and surveys consistently find compensation, benefits, and development to be the three things candidates and employees value the most in their employee experience.
- Compensation can be rewards like salary, bonuses, commission, or company stock.
- Benefits usually include health insurance, income protection, retirement, and paid time off.
- Development refers to formalized efforts to help employees improve, grow, and progress their career.
To help visualize the concept of total rewards, imagine a three-legged stool. A stool needs three solid legs to hold weight and serve its function. If any of the legs is too short or of poor quality, the stool is unstable and uncomfortable. Nobody will want to sit there for long.
Now consider compensation, benefits, and development as the three legs of the total rewards stool. If any one of these areas of the EVP is lacking or poorly designed, the employee experience is incomplete and unfulfilling. Employees will not want to stay for long.
Because compensation, benefits, and development carry the most weight in the employee experience, they are the foundational elements of an effective EVP.
But just as a stool is held together with glue and screws, so too is a foundational EVP augmented by other important reward programs like wellness, recognition, perks, work-life flexibility, and performance management.
Mix of Rewards
To continue the stool analogy, consider the variety of stool designs that differ in color, shape, and size. A tall stool with a footrest is appropriate in one situation, whereas a swivel stool with a backrest is appropriate in another. Each stool meets the particular needs of the people who use them.
The same idea applies to total rewards design. Each company varies in its characteristics, such as business objectives and employee population. Like selecting a stool of the right color, size, and shape, selecting the right mix of rewards is key to creating a compelling EVP that attracts and retains the right talent for your organization. The following principles help identify the right mix of rewards:
- Holistic. Your approach to your EVP is comprehensive in considering all aspects of the total rewards spectrum. The goal is not to offer everything in every category; rather, to consider which offerings will create a holistic, balanced proposition that attracts and retains the right talent for your organization.
- Deliberate. You are proactive and intentional in your total rewards design. You offer rewards that align with your philosophy and support your business objectives.
- Tailored. While data-driven in your approach, you do not simply follow the crowd. You understand that total rewards need not look the same in every company. Rewards are tailored to the needs of your organization, employee population, and business objectives.
A holistic, deliberate, and tailored total rewards package gives your organization a compelling answer to the question, What’s in it for me? The synergy that comes from selecting the right mix of rewards gives you a competitive edge in the labor market and helps you more effectively attract and retain your people. Taking a total rewards approach to your EVP is what your business needs and your people want.
The team of total rewards experts at GBS is ready to partner with you. Contact us today!