We live in an on-demand world. In almost all aspects of life, algorithms are working behind the scenes to assess our preferences and offer up smarter solutions. Yet for so long, reward programs have resisted joining the revolution, sticking to tired formulas of base pay plus a limited buffet of benefits without looking at whether this aligns to what employees want.
There is a talent crisis lurking in the horizon. Our research on global talent shortages forecasts that in Asia Pacific alone, there will be a deficit of 47 million workers by 2030. The traditional this approach to rewarding people is no longer going to cut it. Organisations will need to work harder than ever to attract and retain the best talent and leaders need to act now to get ahead of the talent crunch. This means optimising their salary spend; paying smarter to get the most from the reward budget, while using the reward program to building an employer brand that attracts the best. But none of this can be achieved without understanding what employees want from their reward package.
So, you need to ask them.
Preferences and perceptions
There are many reasons why a reward package might not be getting the best out of your people. Maybe a big portion of the budget is dedicated to benefits that employees are not interested in. Maybe the package was designed some time ago and reflects the needs of previous demographics.
Whatever the reason, leaders need to understand exactly where to spend money to get the best out of their people while balancing this against what budgets allow. The first step is to use a Total Reward Diagnostic to uncover employees’ existing perceptions of the reward package and gain insight into their preferences.
Taking a data-driven approach gives organisations a solid foundation to reconceive their reward philosophy and package so that it speaks clearly and directly to what employees want and need. Clarity is key, because how the package is communicated is just as important as what it communicates. Diving into the data can take this to the next level by also allowing organisations to tailor their packages to different segments of the employee group, looking at the needs of different demographics.
This was certainly the case for one of our clients in the health and wellbeing sector, where the diagnostic revealed their existing reward program was lacking a holistic and compelling message for staff as to how the company views total rewards and how those programs connect with the broader organisational strategy. Insights from the Total Reward Diagnostic enabled the client to leverage positive aspects of its employee value proposition such as culture and development alongside making improvements to particular reward elements, like base salary.
Building the brand
Traditionally, reward packages have focused on the what, but building a more responsive and effective program requires engagement with the why. To do this, leaders should focus on what makes their organisation uniquely attractive to employees, both in terms of the company’s core purpose and the non-monetary rewards that it can offer. Companies that listen to their people understand what matter to them and can use this knowledge to craft a reward program that builds the organisation’s employer brand. This can become an essential competitive advantage in the talent market.
A well-designed reward program tells a story far more compelling than that communicated by a dollar figure. As one of the organisation’s biggest investments, it signals the organisation’s values, its priorities, and what the organisation thinks about its people both internally and externally. The reward program should speak directly to the people you want to attract and retain, connecting with their individual needs and values, that’s the way to revolutionise reward in your organisation.