What do your employees really want when it comes to compensation and benefits? Not everyone desires strong compensation alone; sometimes, attractive benefits and an appealing employee experience are what make or break someone’s interest in working for your company. If you haven’t asked your employees what they actually want, there’s a good chance that what you offer and what they value is misaligned.
To bridge this gap, many employers are turning from a focus on compensation to a “total rewards strategy,” which considers employees’ needs and wants for compensation, benefits, and the employee experience.
We looked at notes from our recent compensation consulting work and found four trends in total rewards for 2018:
Emphasis on Employee Experience
Compensation is the foundation of your company’s total rewards package, but it shouldn’t be the only component. Benefits, personal and professional development opportunities, recognition, and work-life balance should work in unison with your compensation strategy. These components should not be afterthoughts; it’s best to consider them as you establish wages so you can give employees the full picture. You can also emphasize your organization’s culture as a key part of the overall employee experience. This culture includes your organization’s vision, the people within your organization, and the stories you tell about who you are to people inside and outside of the company.
To keep current employees loyal and potential new employees interested, make yourself known and appreciated for being more than just a paycheck. 47% of employer-identified top performers are actively looking for a new job. Give your employees a great experience and wow them every chance you get and they will think twice about leaving your organization.
Transparency with Compensation Strategy
Websites like Glassdoor are establishing new expectations for transparency when it comes to compensation, nonmonetary benefits, and unique company perks. We don’t expect this to change, so we encourage companies to embrace transparency and explain to their employees what goes into the organization’s compensation philosophy and how compensation decisions are made. By doing so, you’ll help create a culture of trust between management and your employees, and you’ll increase employee engagement.
Greater Focus on Variable Pay
With salary increase budgets expected to remain at 3% (Portland is projected at 3.3%) for 2018 employers are continuing to leverage variable pay to differentiate rewards for top performers. With competition growing, and employers wanting to ensure they’re retaining their top talent, this trend is likely to continue to grow in popularity. Establishing objectively measureable key performance indicators (KPIs) at the individual, team and organizational level can help drive business results and incentivize your high performers.
Flexible or Modified Work Schedules
Schedule flexibility continues to be a highly desirable aspect of the employee experience. Single heads of households will continue to increase as the predominant family unit. Two thirds of all workers in the US have eldercare responsibilities, 75% of which have children under the age of 18. Nowadays, many employees want more freedom in balancing their personal and professional lives, and they want to do so with either remote work options or modified work schedules. Employers should strongly consider options such as flexible work schedules, virtual work environments, telecommuting, compressed work week, parenting hours, job sharing and sabbaticals.
Find out how your total rewards stack up to other employers in your industry. Sign up for the Beyond Compensation: Total Rewards Survey.