Total Rewards and the Employee Value Proposition in the Age of COVID
While many organizations are so focused on surviving the pandemic that they have placed the employee value proposition on the backburners, others have come to recognize a fundamental truth: Employees will remember how they were treated during the crisis. For HCM teams in these organizations, the challenge is determining where and how to spend increasingly limited resources to keep employees engaged, happy, and supported. Total Rewards is one of the most effective avenues for demonstrating a commitment to employee wellbeing and satisfaction, but how can HR leaders build compelling, innovative strategies that account for the challenges of the current environment?
Give the People What they Want
The consensus among Connex Membership indicates that while it may be difficult or impossible to increase salaries for most organizations, there are creative alternatives that can have a big impact on employee morale without requiring significant investment. The rise in appreciation for the value of nontraditional benefits and perks certainly predates the pandemic – compensation is increasingly transparent in our connected world, and only a few companies are capable of winning the war for talent on salary alone – but COVID has certainly forced employers to rethink and reframe their rewards strategies. While things like experience and travel-based rewards were beginning to take off in the years leading up to the pandemic owing to their outsize popularity among millennial cohorts, these are not likely to be viable or attractive in the near term. That said, there are a number of directions employers can look to for low-cost, high-value benefits that keep employees engaged and appreciative:
- Debt relief, scholarships, and tuition reimbursement
- Non-traditional wellness, like financial, mental, and spiritual programming
- Stock options and profit sharing
- PTO buy-back that can be funneled into rewards programs
- Offering a comprehensive menu of voluntary benefits – giving employees choices that include practical benefits like identity theft support and pet insurance
- Providing child-care subsidies or better access to these services
- Stress management and mental health hotlines
- Reinforcing and communicating the value of EAP
- Outplacement services and planning
- Even old fashioned recognition programs can have an impact – as long as they are not tied purely to task-based performance!
Another innovative approach to reframing Total Rewards, discussed in a recent Connext Virtual Think Tank, includes building a tangible, visible framework around career progression. The Millennial predilection for rapid career advancement and clear pathways to development is well-established, and early indications are that Gen Z has a similar set of expectations. As such, employers can differentiate themselves in the eyes of current and prospective employees by establishing programs that address these expectations directly.
Examples of these programs include:
- 1-on-1 remote performance coaching
- Interactive career pathing software
- Standardized professional development plans that include clear timeframes for advancement
- Integrated degree or certification programs tied to specific career advancement plans
The more choices and options for customizing the employee has, the more personal ownership they will feel and the more engaged they will become. While career progression has traditionally been bucketed with performance/talent management, our Members recognized that by listening to what their people were saying about the things that mattered most to them, they could reframe personal development pathways as an ultra-meaningful component of Total Rewards.
In fact, this represents another crucial lesson – the actual elements of a Total Rewards program – benefits, compensation, etc. – are only half the battle. Communicating the purpose and value of these elements effectively is absolutely critical. Most employees do not have a good sense for the totality of the benefits and rewards packages available to them, and even fewer can appreciate what they mean in practice for their personal wellbeing. This is largely because employers struggle with enterprise communications and because the burden of communicating what is on offer often falls to the vendors offering the services, resulting in a poorly unified messaging patchwork.
Communication is Key
Building integrated communications strategies that leverage mobile technology are as much a factor in the success of Total Rewards programs as the value of the programs themselves. This is true in the best of times, and it is even more critical at a moment where employees are largely working remotely, isolated from their colleagues and org culture, and desperate for reassurance and guidance. As one recent Virtual Think Tank participant noted, it is more crucial than ever for managers to be engaged in the process of communicating Total Rewards on a point-by-point basis with their teams, ensuring employees understand exactly what support and benefits services they can tap into. To that end, this participant’s organization developed a unified messaging process and a script for individual managers to utilize during these discussions. However, in order for these efforts to be successful organizations must ensure that managerial training incorporates a comprehensive education on the Total Rewards program and the larger employee value proposition. This is a gap for many organizations who have traditionally relied on third parties in combination with HR staff to manage the messaging entirely. In a world where stress is at an all-time high and communication is at an all-time premium, this outdated model is no longer tenable.
Across the country employers are cutting back on compensation – Connex Members have consistently reported pay cuts, particularly among their highest earning populations – and employees are facing the constant threat of furlough or outright job loss. This has blurred whatever lines still existed between the realms of compensation and Total Rewards, as employers scramble to keep employees engaged and reassert their commitment in spite of tightening margins, budgetary constraints, and tremendous economic uncertainty. In this unprecedented environment, employers in general and HCM professionals in particular must challenge themselves to think outside the box and take the chance on innovation and creativity. While COVID has forced most employers to think beyond basic compensation, the lessons being internalized now reflect the conclusions of years of industry research: tying financial incentives to performance does little to motivate better performance or loyalty; employees want to be paid well, but their loyalty needs to be earned. In order to earn loyalty and commitment, employers need to create an environment that employees want to work in and which they believe is designed to support their personal growth and development.
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