A total reward strategy (TRS) looks at the big picture, bringing together everything that employees value about working for your business. It’s a balance between making sure your organisation is delivering the right offering in the right way for your employees, while making sure that you are aligned with your company strategy, culture, values and of course, budget.

For every organisation, the mix of total reward elements and how they fit together will be different, but a total reward perspective helps you become more appealing to current and potential employees in a broader way. Getting this right enables you to attract and retain the best talent so is vitally important.

Previously, creating and managing a TRS has had its challenges, but it’s certainly a particularly interesting time to be in reward as there are several factors that have been thrown into the mix; the Covid-19 pandemic has changed the landscape of work for good and this has impacted the employee value proposition (EVP). There is a shift in employee views, along with stronger than ever competition to attract and retain talent which is driving employers to adopt more holistic and person-centric programs to help gain competitive advantage. 

The pandemic accelerated the trends that we were already witnessing around a different demographic workforce, where employers are seeing five generations of people in the workforce. But all those groups of people have grown up in a different context and, as a result, want and are motivated by different things.

Generation Z (1997-2012)

Raised in a digital age where smartphones and technology are viewed as essential. Student debt is high on the agenda for this generation, and this can inform their choices around workplace support and compensation. Workplace flexibility is the priority, along with competitive pay and financial incentives, training and development opportunities, tuition reimbursement and assistance with student debt.

Millennials (1981-1996)

The largest generation in work currently, who typically place a priority on wellness, work/life balance, career development and opportunities to give back.

Generation X (1965-1980)

Comfortable using technology and face-to-face interactions. Some employees within this generation are likely raising families so healthcare, flexible working options, childcare and other benefits that help them with a work/life balance are often top of the priority list.

Baby boomers (1946-1964)

Many baby boomers are set to retire by 2029 so monetary benefits can be particularly attractive to this generation, as are retirement benefits and retirement education.

Silent generation (1928-1945)

Finally, the silent generation is the oldest in the workplace. Typically, they value flexible working, plus healthcare and retirement benefits, along with support to transition them into full retirement.

Managing a TRS where the mix of these five generations exist, alongside the current cost of living challenges, the changing views of what is important to individuals after the Covid-19 pandemic, as well as the current ‘race for talent’ that businesses are experiencing make for a very challenging time. On the other hand, these challenges give reward professionals a fantastic opportunity to really examine their current total reward offering, harness employee opinions and establish a longer term plan around a holistic and flexible offering, which really can make a difference to the success of the company.

Challenges around scarce skill sets and the race for talent, make managing compensation vital. Not only base pay but other elements that can be applied, without constantly adding to fixed costs, such as signing on bonuses.

Benefits need to be a mix of voluntary (benefits made available for employees and selected at their own expense, often with the money deducted from the employee’s salary) and flexible (plans which allow employees to make personalised choices from the otherwise standard benefits offering). Getting this mix right and giving choice to employees allows true individualisation and therefore makes the benefit offering meaningful.

Health and wellbeing are increasingly important elements of any strategy; that is the full mix, including benefits and support around physical, mental, emotional, financial and social wellbeing. 

Appreciation and recognition have grown substantially over recent years and are now key to any effective TRS. These need to be available to all and be easy to administer to ensure that kudos is given as close to the event as possible.

Other important elements are flexible working options and work/life balance solutions, career opportunities and development, inclusion and belonging, the work environment itself, the ability to have a voice and contribute, clarity, leadership, and values.

Finally, communication is vital in reaching these different generations; you can have the best TRS in the world, but unless you effectively communicate this in a variety of ways to ensure employee understanding and create engagement in your TRS, it’s pointless.

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