In today’s fiercely competitive and complicated job market, clarity cuts through.
When the best employees are considering multiple roles and offers, recruiters who can best define job roles, outline responsibilities, and share details about salary and other benefits will win out.
A well-crafted total reward statement (TRS) can make a significant difference. A TRS is more than just a summary of a prospect’s compensation. It paints a complete picture of the tangible and intangible rewards potential employees can expect to receive. That includes everything from their base salary and bonuses to health insurance, vacation days, and career development opportunities.
Job Hunters Value Rewards
Job hunters are looking beyond the paycheck to make their career decisions. More often than not, salary isn’t their sole focus.
Take the data from Owl Labs’ 6th annual State of Remote Work Report, for example. The report found that if remote work were taken away, 66 percent of workers would immediately look for a new job that offered that level of flexibility. Over one-third (39 percent) would quit straight away. More than half would take a pay cut to retain remote-working flexibility.
FlexJobs’ 2022 Career Pulse Survey showed similar attitudes. Almost two-thirds (63 percent) of respondents said they would choose better work-life balance over better pay.
Clearly, a robust rewards package can be a huge draw for potential employees, but total reward communicates more to candidates than simply their reward potential.
When these benefits are applied to employer branding and job descriptions, the impact is significant, says Allan Schweyer, president of TMGov.org and partner and principal at the Center for Human Capital Innovation. They “signal empathy and a caring culture and appear to trigger the same positive response as ads aimed at consumers’ emotions.”
It’s down to information asymmetry, he explains. The disadvantaged party (the potential employee) looks for signals about what it’s like to work for a company and how the company treats employees. What’s more, employees pay even more attention to non-cash rewards, and these types of rewards cause applicants to cast employers in a more caring light.
Total Reward Statements Make Benefits Clear
Rewards packages are rarely the focus of job descriptions. When companies do mention them, it’s rarely done in any detail.
Including a total reward statement during the hiring process can change that. A well-structured TRS breaks down the components of the total rewards package into digestible sections, making it easier for job seekers to understand the full breadth of what they stand to gain.
The more you explain employee rewards, the more current and potential employees will value them, writes Michael Puck, HR innovation fellow at UKG. And it’s not just cash-based rewards you need to mention.
“Intangibles and soft values have risen in importance which would suggest including those in your Total Rewards Statement,” he writes. “To put it differently, the Total Rewards Statement from ten or even five years ago needs a complete makeover in order to address the changing values of the workforce. It’s time to expand your total rewards statement to read more like an employee value proposition that describes the different currencies that your employees can expect to receive. Now that is a tool that can make a difference in recruiting and retaining employees.”
Including a TRS in your job ads can do wonders for your recruitment brand as a whole. Using a TRS to clarify your rewards package can also improve employee branding, says the team at Salary.com. “Jobseekers will often research the salary for positions they’re interested in, so it’s worth building a positive reputation to be the employer of choice. This will benefit your talent attraction and talent retention strategies in the long-term.”
So, what exactly should you include? Chris Kille, CEO of Elevate Outsourcing, lists several popular rewards for attracting new recruits:
- Flexible hours and remote work.
- Paid family leave.
- Wellness subscriptions.
- Professional development.
- Student debt assistance.
- Pet perks.
- Free food.
Go Even Further With Personalization
Not every reward is going to be suitable for every employee. A one-size-fits-all approach no longer works, says Celeste Warren, vice president of global diversity and inclusion at Merck.
Speaking to CNBC, Warren says it’s critical to tailor benefits. “If you’re creating benefits and policies and programs that aren’t really meeting your employees where they are with their needs then it’s just basically a waste of time, energy, and resources.”
In particular, rewards need to appeal to employees at different stages of life and at different pay grades, writes Stacey Lowman, head of employee wellbeing at Claro Wellbeing. “Depending on personal circumstances, employees will appreciate different benefits, meaning employers need to take extra care to ensure that all team members are catered for,” she says. “From childcare to transport schemes and after-work socials, it is important to consider the different priorities of the workforce.”
The demand for reward personalization mirrors consumer expectations in all other areas of life, writes Jonathan Best, enterprise sales leader at uFlexReward:
“The trend over the last decade has been for organizations to use benefit technology that is tied to benefit brokerage. That business model provides employees with a set of pre-brokered benefits to choose from which do not reflect what they want, nor provide the level of personalization required. Increasingly employees are seeing the restricted nature of this arrangement, and in many cases would prefer to take the cash-equivalent instead and purchase the coverages and benefits themselves elsewhere.”
Make Sure Rewards Are Fair
However you use your total reward statement during the recruitment process, make sure you do so fairly. A common problem is for businesses to inflate the monetary value of rewards in their TRS, leaving new recruits sorely disappointed when they start work.
Lyssa Test, writing for Lattice’s blog, uses unlimited PTO as an example that doesn’t warrant a mid-five figure valuation. “You can estimate the actual value by calculating the equivalent of their daily pay and multiplying that by the number of days the employee took off in the past calendar year,” she writes.
“For a prospective job candidate, you can take a similar approach by multiplying their proposed daily pay by the number of PTO days included in your policy or offer; or, if you offer an unlimited PTO plan, use the average number of vacation days your employees took off in the previous year.”
Businesses should also ensure total rewards are designed fairly for everyone — and this is even more important when rewards are personalized.
“Ensure equitable design of total rewards for all populations, and check this regularly through pay equity analysis,” advise McKinsey’s Sabrin Chowdhury, Neel Gandhi, and Alex Katen-Narvell. “Ensure benefits support all populations (e.g., LGBTQ+ parental leave), and conduct focus groups with diverse employees to ensure these benefits meet their needs.”
A well-crafted total reward statement communicates a full and fair value of a company’s offering, painting an alluring picture of not just the financial benefits, but also the health, retirement, work-life balance, and professional development opportunities that come with a role.
By clearly outlining these offerings, employers not only meet the needs of today’s job hunters but also position themselves as a desired place to work.
Images used under license from Shutterstock.com.