Three thought leaders in employee benefits and human resources weigh in on what’s changing with total rewards strategies.
Think about a typical job search. For most, the first priority involves finding a job with a great salary, followed by a robust benefits package. But what if you were offered two roles, each with a comparable salary and health benefits? You’d likely ask about the flexibility to work from home, opportunities for advancement, paid time off, among other perks.
In totality, the HR world refers to these features that attract and retain employees as a total rewards.
According to Gartner, “Total rewards is the combination of benefits, compensation and rewards that employees receive from their organizations. This can include wages and bonuses as well as recognition, workplace flexibility and career opportunities.”
Paul Ashley, who serves as Vice President and Consultant of Corporate Benefits at insurance advisor firm, NFP, says an effective total rewards strategy goes even deeper. NFP considers eight core components when advising clients on total rewards design, including:
- Leadership Effectiveness and Support
- Community Impact
- Work Environment and Resources
- Learning and Development
- Diversity, Equity and Inclusion
A successful total rewards strategy helps companies stand out from the competition to recruit top talent, while supporting the diverse needs of current employees. It also requires promotion.
“One of the most important aspects of total rewards is how you communicate it internally,” Ashley says. “Employers often do a great job making boardroom decisions about what benefits they’re going to offer, but do a terrible job branding, marketing, and communicating how an employee can take advantage of them.
“When you partner with a company like Marathon Health, you not only gain a really strong clinical partner for acute care, primary care, wellbeing care and wellness coaching, you acquire another delivery channel in your tool belt to communicate key health and benefits information to employees.”
Total Rewards Changes for 2023 and Beyond
HR leaders constantly need to re-evaluate and adapt their total rewards programs to serve current and prospective employees. Ashley says some common changes to total rewards for 2023 include:
Digitization of the employee experience
Ashley says the pandemic amplified the digital transformation of the healthcare industry, leading to a sharp increase in virtual visits and the use of digital health tech like Bluetooth-powered glucometers and blood pressure cuffs.
“We’re using apps more, we’re using virtual healthcare more, and both the provider community and healthcare consumers have become more comfortable with them,” Ashley says. “Employers really need to consider, ‘Do we have a good digital health strategy as well as a brick-and-mortar strategy?’”
Increased focus on diversity, equity, and inclusion
Ashley says employers increasingly consider diversity, equity and inclusion (DEI) initiatives as part of a well-rounded total rewards strategy that drives belonging.
Total rewards examples may include:
- Diversity programs for leadership, recruiting and hiring
- Pay equity audits
- Implicit bias training and education
- Community participation in diversity, equity and inclusion-based programs and initiatives
- Affinity and resource groups
Aside from helping employees of all backgrounds feel welcome and comfortable at work, DEI initiatives remove barriers to healthcare. For instance, offering virtual care as part of a total rewards program increases health equity by connecting employees who lack transportation or live in rural settings with high-quality primary care and mental health services.
Hybrid work flexibility
Even with many workers back in the office, most companies now offer flexible working arrangements, a post-pandemic trend that will most certainly be a part of total rewards strategies in the future.
“Employers that don’t think of hybrid as a strategy are going to lose talent, and they won’t see as many people applying for and staying in those roles,” Ashley says.
Move to self-funded insurance
Ashley says another trend involves employers moving from fully insured plans to self-funded plans, often in conjunction with an employer-sponsored clinical partner. With a self-insured plan, employers pay for claims out-of-pocket as they arise rather than paying a premium to an insurance provider.
“When you move to self-funded, having a great clinical partner like Marathon becomes even more important and powerful,” Ashley adds.
Attracting and Retaining Talent
Delivering a successful total rewards strategy involves offering benefits employees want and use, and providing flexibility and customization to serve employees of all backgrounds.
In a recent episode of Marathon Health’s webinar series, Efrain “Ricky” Baez, Owner and Chief HR Consultant at Baezco Learning and Co-Host of the HR Talk! Podcast, spoke to the importance of offering a diverse total rewards package.
“When I consult with clients, I always tell them, ‘Please don’t approach benefits with an all-in-one approach,’” Baez says. “You really have to know what your employees value. If you don’t know what your employees value, you’re not going to have a good grasp about what’s going to keep them there.”
Glenn Haskell, Director of Benefits at New Balance, says he was asked by leadership to implement a fleet of exciting new benefits in 2022 to attract new employees to the organization and retain current workers. One such addition — a highly popular lifestyle savings account — provides full-time employees with a $1,000 annual stipend they can spend however they wish. Whether it’s for a gym membership, pet care, tax preparation or golf equipment, it gives employees the flexibility to use the benefit in a way that best suits their needs.
“It gets about a 70% uptake,” Haskell says. “It has immediately become one of our more popular and highly valued benefits.”
Ashley says large organizations often have multiple generations of employees and suggests designing flexible total rewards programs to support employees of all ages. For example, older workers often prefer visiting a brick-and-more health center, while millennials and Gen Z employees would rather schedule a virtual appointment.
“No matter what decisions you make, make sure to partner that new benefit or strategy with a thoughtful internal communication and marketing plan,” Ashley says. “And with a dispersed or hybrid workforce, it becomes even more important. The employers doing this really well put as much effort into the internal communication and support systems as they do the actual benefit.”
Need help with your total rewards strategy?
Paul Ashley, Vice President and Consultant of Corporate Benefits at NFP
Efrain “Ricky” Baez, Owner and Chief HR Consultant at Baezco Learning