How to Leverage Total Rewards
How to Leverage Total Rewards
Cultivating a better relationship with your employees can contribute to your organization’s longevity and success by developing a customized approach to how you give back to your employees. Rebecca Shipley, the Total Rewards Practice Leader at Brown & Brown, joined our Benefits Breakdown podcast to explain what Total Rewards are and how you can build a Total Rewards strategy that supports your employees’ needs and helps to meet your company’s goals.
Q: What Is Total Rewards?
When we think about Total Rewards, we like to think of it as everything you offer your employees in exchange for their contributions to your company. You offer them a number of things, and, in exchange, they contribute their skill set, time and experience to the company. Total Rewards can be several things, but the bedrock of Total Rewards is benefits and compensation. Many companies describe total rewards as just those two things, but it can also run the whole gamut. All the way from the type of culture you offer, to the voluntary benefits available, to special things such as sabbaticals and time off.
Q: What are some things a smaller, mid-market organization that is trying to offer a robust Total Rewards program could be doing? What are some things they should be focused on?
I would say the best thing they could do is articulate all of their offerings. Many companies do that through a Total Rewards statement, so they can show their employees everything they offer and then quantify it. So many people get benefits and are not quite sure of the cost-share, meaning what the employer pays. They know their base salary, and a lot of people think that is all they are getting paid.
However, once you quantify what the employer is paying for benefits, what the 401(k) employer’s match is, what part of your salary is designated for time off and holidays, that shows employees what they are really getting paid. Employers do so much work to put these offerings together. Bringing it all together and articulating it is super powerful, and I think it is a differentiator for employers. They can talk to their employees in a more holistic way instead of only discussing their base pay.
Q: What things could HR teams actionably do so we do not have that fear of people leaving?
The number one thing I would advise for any organization is talking to their people and listening to them. I think about it as chunks; talk to your executive team first and understand what is important to them. What is their philosophy? What is their mission? What are they trying to accomplish, and what kind of talent and environment do they want? Then talk to the management group. These are the day-to-day people managers. The managers are your liaison between the group of executives and employees. Then, figure out a way to talk and listen to your employees. I love doing focus groups. People will talk to you, if you ask them, they will tell you, and you just have to be willing to listen.
Once, I was working with a customer, and the CEO said, “If I put in a dog park, it’s going to make everybody super happy. They’re going to bring in their dogs, and they’ll be able to run around. That means they’re going to stay here and work longer and be happier.” It was over a million dollars to do this project, and I said, “Okay, that sounds really cool. Let me talk to some employees, though.” So, I went and talked to several employees. They all thought it was a horrible idea. They said, “Can you just put in a cafeteria where we can sit down and eat and converse with our teammates, and just take a break?” That cafeteria cost $250,000. It was such a good reminder that we shouldn’t make assumptions about what people want. Putting in that cafeteria made people happy. It did exactly what the CEO was trying to do without spending a million dollars in the process and inadvertently make people mad.
It’s about listening, understanding and spending money effectively. That’s what gets people excited.
Q: Do you see organizations structuring compensation differently based on demographics? What do you see organizations doing to incentivize different generations in the workforce?
Great question. That’s where the Total Rewards review comes in. When you think about compensation, you probably don’t want to have wildly different compensation structures in place for generations. You want to keep that consistency and fairness in the organization, but it brings up the point of how the drive of a 21-year-old might look different from that of a 60-year-old. They all want compensation, and they all don’t think that they’re paid enough – that is a common theme for sure.
What makes a difference is listening to your employees and understanding what drives them. Maybe Baby Boomers and maybe Gen X are not as interested in tuition reimbursement or student loans reimbursement, which is a huge driver for Millennials and Gen Z. These student loans are real, and it’s a big deal to them. Comparably, maybe Gen X is more interested in the retirement side of things. Is there some flexibility there?
If you design your Total Rewards program in a way that speaks to every person somehow, that’s the ideal way to design a Total Rewards program. Pick the Total Rewards offerings that make the most sense and make the most impact across your entire organization
From a compensation standpoint, we usually leave that close to the same. A total rewards strategy and review is where you can pull other levers and get at the different personalities in your organization.
Contact us if you have any questions and read more about Total Rewards offerings.