In a changing working world that’s shifting its focus on employee wellness and engagement, it’s vital for employers to offer their workers support options. In 2022, the American Psychological Association found that 81% of workers consider how employers approach mental health and well-being when considering a new position.
To avoid absenteeism, attract new workers, and improve the performance of current workers, it’s important for employers to offer more than basic benefits. But what type of benefits are best for your employees, and where do you start? The answer lies in total rewards.
In this article, we discuss total rewards, how they impact your employees, and walk you through a few total rewards strategy examples.
What is a Total Rewards Strategy?
A total rewards strategy is a business strategy that employers use to incentivize and care for their employees through a broad range of compensations. This compensation can come in many forms, both monetary and non-monetary.
Monetary Compensation
Monetary compensation seems self-explanatory, as it’s compensation in the form of money. However, this money can be categorized in a variety of ways. The most common form is through the payment of wages. In a total rewards strategy, wages should be competitive compared to industry standards.
Non-Monetary Compensation
Non-monetary compensation in a total rewards package can come in a wide variety of options, but their main characteristic is that they’re not directly tied to an employee’s standard wages. They also don’t come in the form of financial pay like wages and bonuses. The most popular form of non-monetary compensation is flexibility in their schedule, or paid time off.
Another popular form of non-monetary compensation in a successful total rewards strategy is offering development opportunities to employees. These opportunities can be in-house training, online classes, or conferences where they can meet and learn from peers.
Even though these are the two most popular forms, there are plenty of other ways to offer non-monetary compensation – including options that are fairly low cost to employers. From various stipends to different perks, there’s an opportunity for employers to get creative and deliver a superior employee experience.
These two types of compensation are often grouped as a package given to the employee upon hire, or after a short probationary period. However, sometimes components of the total rewards will be delayed as a form of a reward to incentivize the employee, such as performance recognition.
How Can a Total Rewards Strategy Attract and Retain Quality Workers?
Total rewards strategies are a vital tool that employers can utilize to build and maintain their workforce. From the start, a total rewards compensation package will help you attract the best talent in the field and motivate your employees to stay once hired.
These employees will continue being driven to reach specific incentives like earning performance recognition. But they’ll also be driven by a sense of satisfaction because of how well they feel taken care of by their employer. Below, we’ll explore the two components of a total rewards strategy, total reward strategy examples, and the benefits these strategies can provide.
4 Total Rewards Strategy Examples
Example 1: Flexible Pay Arrangements
In a world where 63% of American workers live paycheck-to-paycheck, flexible and reliable payment arrangements are vital for employee well-being. By providing early access to wages or neo-banking solutions such as digital pay cards, employers can help relieve the financial stress on their employees.
Example 2: Wellness Programs
A wellness program can include many ways to take care of your employees. Wellness perks can come from a gym membership stipend, certificates for self-care (like a massage), etc. It’s not just the physical well-being of their employees that the employer should care about, however.
According to the World Health Organization, depression and anxiety cause over 12 billion working days to be lost yearly. This is particularly detrimental for companies that don’t support their employees. That’s why it’s vital for mental health (like financial wellness) to also be accounted for in a total rewards strategy.
Example 3: Employee Recognition Programs
Employee recognition programs are an excellent way to reward employees for their hard work and dedication. A total rewards strategy that provides this recognition will make employees feel seen and valued, which will encourage them to remain with their employer and continue working hard. These rewards often come as bonuses for outstanding performance or reaching certain milestones.
Example 4: Continuing Education and Training Programs
Another effective component of a total rewards strategy is providing employees with education and training. This helps them learn new skills or build on the ones they already have, which benefits employers in the long run as well.
By giving your employees room to develop themselves, you support their success while positively impacting their performance.
Key Benefits of Implementing a Total Rewards Strategy
A total rewards strategy should benefit the employer and employee by incentivizing both sides of the relationship. Employees appreciate the effort and recognition, and employers reap the rewards in return from satisfied workers. Here’s a look at two real examples of these perks and benefits.
Improved Employee Retention
It’s not enough just to bring in the best in the industry when hiring; you also want to ensure the best want to stay with your organization after you’ve brought them on board. A total rewards strategy is critical to helping you gain higher employee retention rates.
By avoiding high turnover, you save your company valuable time and money by not needing to constantly search for new people and train them to work within the organization.
Enhanced Employer Branding and Recruitment
A good reputation can follow a company everywhere, making hiring and competing against other employers easy. A solid total rewards strategy can bolster your reputation, creating an employee-friendly brand that people will want to work for.
Ready to Learn More About Total Rewards Strategies?
A total rewards strategy is the monetary and non-monetary compensation an employer offers to their employees as they sign on, and after certain performance milestones. This strategy is vital for employers who want to retain their frontline workers as long-term employees.
The benefits you decide to offer must be broad to cover many facets of your employees’ needs. But how you deliver these benefits is just as important. You want a fast, reliable, and effective way to get your employees their monetary compensation and manage their perks.
That’s why, at Juice Financial, we’ve put so much effort into developing our FinTech Solution — a modern service that offers employee payout, manages expenses, and delivers rewards. We want to help you and your employees take full advantage of your total rewards strategy with ease.
If you’re interested in learning more, discover what we can do for you today!