It’s a war zone out there for employers. A combination of socioeconomic factors like the Great Resignation means employees are firmly in the driving seat when it comes to the labor market. They have plenty of options to choose from, which means employers need to work hard to win the talent war.
The power of total rewards for attracting and retaining talent should not be overlooked. Salary isn’t the only thing today’s job seekers care about. They also want other needs met, whether that’s workplace flexibility, generous maternity leave, or comprehensive health insurance.
That’s why employers who work hard to create thoughtful total reward packages shouldn’t be shy to shout about them — and why broadcasting those reward packages could be the key to convincing job seekers to apply.
Salary Alone Isn’t Enough to Attract Employees
Pay has always been — and continues to be — one of the most important factors for employees accepting a new job offer according to Gallup research. But what’s changing is the number of people who look for both “pay and benefits,” says Gallup’s Ben Wigert and Ryan Pendell.
“Since 2015, this item has risen in priority for workers from No. 4 on our list with 41% of employees citing it as ‘very important,’ to No. 1 with 64% of employees naming it as a critical factor in taking a new job.”
The well-publicized talent war is a major factor in this change, they add. Employees know wages are rising across the board, and are in a position to demand more from potential employers.
SHRM’s 2021 report Surviving the Great Resignation has similar findings. When asked why they were actively looking for new jobs, respondents answered as follows:
- 53 percent said they want better compensation.
- 42 percent said they want a better work-life balance.
- 36 percent said they want better benefits.
What kind of rewards are employees looking for exactly? Research by EY shows that in addition to “opportunity for increased total pay” (their top priority), employees also want flexibility in where they work, better career advancement, better well-being programs, and more learning and development opportunities.
Tailor Your Reward Package to Meet Demands
If you want to use rewards to win the talent war, you need an exceptional employee reward program. Whether you’re creating a reward program for scratch or optimizing your current one, this isn’t just a job for HR.
“Total rewards should be part of the organizational culture and embraced by all employees, starting at the top,” says Peter Sinanian, director of global strategic partner marketing at workflow platform ServiceNow. “Without a commitment from the C-Suite, it is difficult to create a total rewards program that achieves its goal of reinforcing the talent management strategy and driving business success. The HR department’s role is not to own the program, but rather to provide tools and guidance to enable the organization to leverage rewards successfully.”
Listening to your current employees is essential. A survey by Artemis Health found that three-quarters of companies are now basing benefits on employee feedback, an increase of 33 percent since 2019.
What makes up your reward package can depend on your company, write McKinsey’s Sabrin Chowdhury, Neel Gandhi, and Alex Katen-Narvell. While some market leaders may offer premium benefits in every category, others could tailor their reward package in a way that reflects their business’ purpose. “For example, a large financial services institution provided above-market retirement benefits—both retirement funding and education—to reinforce their purpose of providing financial wellness to all,” the authors explain.
Businesses can’t rest on their laurels. Employers went out of their way to meet the health and financial needs of their employees and loved ones during the pandemic, and that has caused a fundamental change in the employer-employee relationship, says Alyssa Place, executive editor at Employee Benefit News.
The kind of rewards offered during the pandemic, like improved employee healthcare, have become the norm. “Employers must stay ahead of the game and continue to offer competitive benefit offerings that go beyond basic health and wellness plans,” she writes.
“Managers and HR leaders must communicate and agree on the best way forward,” Place adds. “Only in this collaboration can businesses move forward with a clear strategy for the challenges ahead — and provide a bright future for their employees and their businesses.”
Make a Big Deal About Your Rewards to Win the Talent War
Just having an attractive reward package isn’t enough to tempt potential employees, however. Employers need to broadcast their rewards offering before, during, and after the hiring process.
This is because the best recruitment strategies are the most transparent, says the team at Paydata. By being clear about your rewards offering from the very start, you remove the risk of jobseekers rejecting your job offer after a lengthy interview process because of your benefits, thereby wasting your time and theirs.
They recommend companies list benefits on job ads, alongside the salary. For instance, include things like:
- Health insurance.
- Travel pay.
- Regular reviews.
Not only does this avoid situations like the one described above, but it also lets you demonstrate your company culture and your commitment to employees. Showing benefits and rewards offered by your company increases your competitiveness in a tight job market and makes it more likely you’ll receive a large number of applications from top candidates.
Companies with strong total reward software can take things even further. As well as showing potential employees what their total reward statement will look like the day they join, they can also use modeling functionality to forecast the value of their rewards in the future.
“This would allow a new recruit to see their employee benefit programme value in, say, a year’s time after the annual pay review, or whenever new entitlements become available,” writes Tim Brook, head of engagement and platforms and HR Solutions at Equiniti.
With some tools, like uFlexReward, candidates will be able to design their own reward package before they join.
Rewards Offer a Sustainable Way to Attract Talent
For employers who use only high remuneration as employee enticement, there’s a risk that they’ll win one battle but ultimately lose the talent war. The problem with throwing money at the problem through higher and higher salaries is that there’s only so much to go around. Eventually, that money will run out. And, given the current economic climate, that could be sooner rather than later.
Advertising the strength of their total reward package gives businesses a way to continue to attract top-tier talent, despite the economic challenges ahead.
Businesses should not simply focus on pay, says Claire McCartney, senior resourcing inclusion adviser at the Chartered Institute of Personnel and Development. “It is now more important than ever to be proactive with workforce planning and to develop compelling offerings to attract and retain a diverse group of employees.” For instance, flexible and hybrid working arrangements could seriously strengthen an employer’s offering.
You’ve worked hard to design your total reward package to provide the kind of support and motivation that sends employee engagement levels soaring. Now it’s time to use all that effort to attract the kind of top-tier talent your company requires. Communicate your strengths and use your rewards as a weapon to win the talent war.
Images by: Jason Goodman, Christina @ wocintechchat.com, Amy Hirschi