Employers modernizing total rewards programs
In a tight labor market, employees are demanding more out of their employers and out of their benefits packages. And apparently, employers are listening.
Employers are increasingly looking for ways to upgrade their total rewards programs to keep up with the changing workplace, a recent Willis Towers Watson survey finds. That includes career coaching, flexible work schedules and personalized benefits.
Nearly two-thirds of employers (66%) surveyed have made at least one change to their total rewards program. Out of the remaining third, two out of the three plan to implement changes this year, while the other third looks to make changes over the next three years.
In droves, employers this year have announced changes highlighting those benefits. For instance, Amazon said it was looking to fill more than 250 virtual jobs that allow workers to work from home. And Chipotle and Lowe’s expanded education benefits and career training programs for their employees.
“With a highly sought-after talent pool, more employers are looking at their benefit packages to make their job offer more appealing,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefit Plans. “Savvy employers are taking a closer look at the needs of their current and potential employees, and carving out unique benefits that meet their needs.”
But while employers are recognizing the need to offer more, nearly half the companies polled by the consulting firm admit they don’t know which benefits their employees’ value. Even less understand which benefits potential candidates want. The survey, which polled 275 U.S. companies, found that employees care about flexibility, transparency and personalization.
In the past, total rewards programs relied mostly on compensation and benefits, but today’s workforce is interested in a more holistic and personal approach, says Adrienne Altman, North American rewards leader at Willis Towers Watson.
“One-size-fits-all was pretty sufficient,” she says. “But now, you've got different expectations from different employees based on generations and based on different functions.”
“What we’re seeing is employees are saying: I want information that I get to be relevant to me,” Altman says. “I also want to have some choice and flexibility because my needs are different to yours.”
This explains why two-thirds of the companies polled are working to improve their personalized communication with their employees over the next three years.
Through her research, Altman says the way companies get work done is changing. She says the traditional workplace is being replaced with a more agile one because of the technology firms are incorporating.
“Traditionally, people have been rewarded based on a set of goals and a set of performance measures for doing their role,” she says. “But if roles are constantly in flux, then the current construct of how you reward your people will have to change.”
As millennials make up more of the workforce, companies should also focus on pay transparency when they upgrade their total rewards programs. And just like personalized communication, Willis Towers Watson found that nearly two-thirds of employers plan to improve pay transparency within three years. Following legislative changes that aim to address wage inequality, today’s employees are very comfortable talking about pay in the open, Altman says.
Part of Altman’s research was to look at the total rewards programs of leading companies versus lagging ones.
“Leading companies didn't just think of comp and benefits,” she says. “Rewards include things like career opportunities, well-being, learning and development and they are more likely right to have a well-articulated strategy that includes all of those elements.”