Why should employers provide total reward statements?
Now that salaries are struggling to keep up with inflation, leveraging rewards and benefits is key to retaining top talent and enhancing employee financial wellbeing.
When employers were asked how they would rate employees’ understanding of their compensation, rewards, and benefits package, Gallagher’s State of the Sector 2022/23 research found that just over half (53%) rated this as either excellent or good – which is a truly missed opportunity.
Connecting total reward with the moments that matter to employees allows them to fully appreciate what is offered and fully engages them in the valuable rewards and benefits that employers work so hard to provide. Now is the opportune time to combine and communicate fixed or core-funded benefits, value-added benefits such as retail discounts and flexible options, including holiday trading and pensions.
Why are they a good idea for SMEs in particular?
SMEs sometimes do themselves a disservice. They are often more flexible and fluid in what they can offer their people and are more responsive to changing needs and feedback but forget to share this value in pounds and pence form to their people. Right now, costs are going up for everyone. SMEs face a tough challenge in not passing all their cost increases to clients and in motivating staff. Organisations are groups of people working together, but they are all individuals too. Employers therefore need to resonate, and SMEs have the agility to do this right now. They also have the agility to have relevant touchpoints to provide a rounded employee experience when it comes to all things people, reward and culture – in short, the employee value proposition (EVP).
How can they provide these?
We all have different needs and wants, and it’s really important to ditch the one-size-fits-all approach so the employer can offer more choice. Gone are the days where you communicate benefits to joiners, and typically the reward package is only looked at when someone leaves to see if where they’re going is offering a better deal. There are two parts to how this is made available – firstly, the flexibility and choice aspects and secondly, the employer communicating its EVP, ie what more it offers than salary. Employers need to think about how they can make this resonate with their demographic. We all care about protecting our future and most employers offer some health or protection insured products, as well as a mandatory pension. There are then the other value-added options – such as birthdays off, flexible working, training, culture, working environment – all of which, in addition to the benefits, make up the EVP. But before this, the employer needs a coordinated timeline plan, including what it looks like from the employee’s lens, overlayed with HR projects such as annual pay reviews and insurance renewals.
How can technology support this?
Technology and online is the only way to do this. Ten-plus years ago, creating glossy mailout statements took months on end as technology was clunky and inaccessible for SMEs due to cost and resource, so an offline approach was justified. However, nowadays by the time the TRS is launched in this way the information is out of date and there are also ongoing costs of maintaining. Added to this is the cost of finding a data secure printer and postage. But by going online you’re looking at half that cost and you also have the efficiency and nominal costs of resource.
In addition to simply displaying employee data, technology allows the employer to use eligibility data to individualise messaging to different populations. For example, creating touchpoints based on nudges to employees that may be particularly relevant to their life stage, where someone returning from parental leave may want to trade annual leave or top up medical insurance to add their new family member.
A tech-first approach also gives HR and payroll the opportunity to update data on the TRS regularly like they do with HR systems, so employees have accurate on-demand information which is always living within the organisations and people within it.
What impact can TRSs have in employee engagement with their benefits?
This year, we’re seeing the reemergence of reward statements, which are becoming popular again perhaps because they give employers an opportunity to communicate the current benefits package, which is undervalued by employees. These can include fixed benefits, funded benefits, learning and development, and other provisions so they have more visibility across the employee population. Additionally, employers are now having to pay slightly higher salaries to retain top talent while also increasing their benefits costs in the way of employer pension contributions, life assurance and income protection, and there might be a salary-related bonus or performance-related bonus as well. All of these increases are not currently being communicated to the workforce, but there’s an opportunity through our platform and others to do so, and it’s a missed opportunity when existing benefits aren’t communicated. There’s a lot you can offer but first communicate what you already have, understand the demographic and put it online, then add all the other options that are out there in the market today.
How can TRS be integrated into a wider communications strategy?
Through joiners onboarding, events, wellbeing days, annual salary reviews, renewals of medical insurance, benefits roadshows, etc. By having and online TRS employers enhance employee understanding throughout their lifecycle with the organisation because they have a comprehensive view of their total benefits package, including both financial and non-financial.
How can employers measure the impact of TRSs?
If we define an EVP as ‘what’s in it for employees’, organisations seem to be doing an average job at communicating this.
Interestingly, organisations that reported having a written EVP rated their employees’ understanding of both pay, rewards and benefits, and career development significantly higher.
As mentioned earlier, leveraging rewards and benefits is key to retaining top talent and enhancing employee financial wellbeing, but also in promoting less tangible aspects like culture and belonging. This is where communicators can really make a difference – by raising awareness of what makes an organisation a great place to work beyond the pay packet.