The New Way to Get Paid - How Total Rewards is Taking Over
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Looking to draw in top talent? You’ll need to think beyond the paycheck, as the concept of Total Rewards has taken over. The idea that compensation is a comprehensive package including health benefits, career development opportunities, culture and work-life balance in addition to pay, Total Rewards is a holistic approach to hiring and retention. In this webinar, we’ll discuss how to implement this approach in your workplace and what it could do for your company's growth.
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The New Way to Get Paid - How Total Rewards is Taking Over
- 1. THE NEW WAY April 11, 2017 / 10-11am How Total Rewards is TO GET PAID is Taking Over Speaker: Tana Thomson Speaker: Tyler Meuwissen Moderator: Brandon Laws
- 2. 1. 30-minute presentation & 15-minute Q&A 2. Enter Questions in the Chat Window throughout the presentation 3. Slides & Recording available to attendees 4. Get alerts about new events, webinars and content by subscribing at xeniumhr.com Housekeeping Items
- 3. SPEAKERS Tana Thomson, VP of HR, Xenium HR Tyler Meuwissen, Comp Analyst, Xenium HR • Certified Compensation Professional (CCP) • Leads an HR Team of 20+ HR Professionals • Been with Xenium since 2001 • Supports HR staff for data analysis and project work • Consults on compensation projects
- 4. AGENDA / OVERVIEW What is Total Rewards? The components of an effective total rewards program Examples of how various companies are shifting the way they pay their people How to build a total rewards program
- 5. What is Total Rewards? A combination of elements that define an organization’s strategy to attract, motivate, retain and engage employees. Often broken down into five categories: Compensation Benefits Work-Life Effectiveness Recognition & Performance Management Talent Development
- 6. Compensation Programs and employer used to supplement the cash compensation employees receive. Include a variety of options, such as: • Health, Dental, Vision Insurance • Income Protection • Savings and Retirement Programs • Paid Time Off • Tenure Awards • Paid Parental Leave Pay provided by an employer to its employees for services needed (i.e. time, effort, skill). Combines both fixed and variable pay tied to performance: • Often the foundation of a company’s Total Rewards Strategy • Includes: • Base Pay • Commissions • Incentives (Cash-Based) • Profit Sharing • Equity Benefits
- 7. Work-Life Effectiveness A specific set of organizational practices, policies and programs, plus a philosophy that actively supports efforts to help employees achieve success at both work and home. • Flexible Work Schedules • Remote Working • Job sharing • Wellness Programs
- 8. Recognition & Performance Management • Formal or informal programs that acknowledge or give special attention to employee actions, efforts, behaviors or performance. • These programs support the overall business strategy by reinforcing behaviors (e.g. accomplishments) that contribute to the greater organization success. • Spot Bonuses • Featured Employee of the Month • Goal-Specific Awards
- 9. Talent Development When a company offers opportunities and tools for employees to advance their skills and competencies in both their short and long term careers. • Tuition Reimbursement • Training Programs • Career Coaching • New Technology Training
- 10. The Compensation Shift Competitiveness Highly Skilled Workers Compensation Shift Employers should increase focus on the creating and enhancing their Employee Value Proposition* *Set of associations and offerings provided by an organization in return for the skills, capabilities and experiences an employee brings to the organization. • Accurately determine and size your total investment in workforce programs to ensure it’s in line with both financial realities and business needs. • Improve your value-to-cost relationship by allocating the desired total investment across your portfolio in ways that drive the right employee behaviors. • Create a framework that adapts quickly and efficiently to changes in your business strategy and workforce composition over time, and across countries and employee segments. *Willis Towers Watson
- 11. (Start-Up) Technology Company • Low on initial capital which caused a strategic shift in how the company attracted talent. • Below Market in Compensation • Great Culture • Flexible Work Environment • Stock Options provided • Consistent look at their benefits, seeking to add another elements each year.
- 12. (Growth) Technological Company •Evolved their current benefits further to be more competitive. • “Think outside the box” approach when it comes to rewards. • Their employees are their “money maker”
- 13. (Growth) Healthcare •Focus on culture and work environment •Creative tenure options •Quarterly bonus programs
- 14. (Mature) Non-Profit •Robust Holiday and PTO plans •Flexible work environment/scheduling •Mission led
- 15. (Mature) Business Services •Sabbatical at 5 years •Unlimited PTO •Concierge Services • Employees working long hours on projects can have food provided to their families. •Employee Stock Ownership Plan
- 16. How do I get started? 1. Select your project team • Assessment 2. Design • Employee Value Proposition • Company/Employee Surveys 3. Execution 4. Evaluation
- 17. Employee Value Proposition & Total Rewards
- 18. Target Employee Values as it relates to Compensation/Rewards/Recognition Integral part of Total Rewards Development Company Surveys Sign Up for Xenium’s Annual What People Want from Work Survey to find out what your employees value Sign Up at www.xeniumhr.com/what-people-want-from-work
- 19. Questions?
- 20. Resources • Please take our survey following the webinar • Recording/slides will be available following the session • We’ll follow up with a Total Rewards checklist template • Visit xeniumhr.com/compensation to learn about our compensation consulting services
- 21. Join us for our next webinar: REGISTER: http://bit.ly/burnout425
Editor's Notes
- How we initially treated benefits has evolved. The focus has shifted from standard benefits rewards to more creative benefits such as Tenure Awards; 3 week sabbatical after 10 years, 1 year of house cleaning after 5 years etc. Additionally, the market has moved to providing paid parental leave.
- Especially with Millennials – people can pretty much work wherever. Coupled with the increase in traffic and work life considerations – remote working has becoming a beneficial perk for companies to offer their employees. Sandwich Generation – people are taking care of kids and parents and need the flexibility. A new trend in total rewards is the inclusion of company wellness programs often tied to other benefits programs such as the employee portion of benefit premiums.
- It’s not all about focusing on how well you compensate your employees but rather how well you can enhance and develop their well-being. Recognition has proven to be a vital segment of total rewards to motivate and develop employees.
- You can’t lead in all categories, so it is vital to choose rewards that align with your companies values and business strategies. In the next slides we will discuss how some companies have transformed their total rewards approach.
- Over the past few years the trend in compensation has evolved to a more holistic approach, in Total Rewards. In the past, companies could rely on robust compensation and benefits packages to attract employees. However, with the increase in competition for apex talent and the scarcities of highly skilled workers has caused companies to get creative with their rewards strategy.
- Start up companies, with their low initial capital, tend to come in a bit lower than market when it comes to compensation. However, in order to remain competitive, companies focus on proving a unique culture with a flexible work environment and include stock options for employees come aboard. Additionally, one such start up technological company offers 401 (k) matching, flexible spending accounts and vehicle reimbursement. This company puts out annual benefits surveys to employees to help guage what their emploeyes value and ways they can improve their program. Goal is to add another element each year.
- Another tech company, but in the growth stage of the business life cycle understood the need to refine their current rewards offerings in order to remain competitive in what is often considered the most competitive market. This included moving from a standard IRA to a 401(K) policy with percent matching. The company knew that simply increasing compensation wouldn’t be enough to attract the top talents which tended to be from the Millennial generation and valued other things instead of strictly compensation. The company chose to switch to an unlimited PTO plan, where employees could take PTO when they needed. Additionally, they moved to a Paid Parental Leave program, so new parents wouldn’t be concerned with a loss of income during an important time in their lives. The company understood that the employees are their money maker and the greatest asset to their company and there well being in crucial to the success of the organization. This approach, along with a fun and inclusive environment helped the company stand out in a competitive market and allowed them to continue to attract and retain talent. Finally, knowing that millenials change jobs every 3-5 years, the company looks to expand upon their current tenure related benefits.
- Another company in growth mode, but in the healthcare industry chose to take similar approach to the rewards strategy. Like the previous, this healthcare company focuses on company culture as their primary catalyst for rewards programs. They offer quarterly bonus awards to their employees and got creative with their tenure related benefits by giving employees the the option to take a 4 week sabbatical at 5 years or to have certain portion of their student loans paid off by the company. Quarterly bonus program Focus on culture
- One type of organization that is reliant on being creative with their total rewards strategy are non-profits. Much like start ups, non-profits are often constrained by budgetary restrictions which make it difficult to offer competitive compensation to potential employees. To address this issue, one such Non-Profit decided to focus on non-monetary rewards such extensive Holiday and PTO (at least 30 days of PTO at hire). The organization also chose to pay employees 1% of the earnings to pursue other social causes that were passionate about. Additionally, the organization chose to focus on a very flexible work scheduling to allow employees to be able to make a schedule that worked well for them. Finally, and probably the organization’s strongest attractor is to focus and reinforce the organization core mission, vision and values. Non-Profits are mission led and often the cause of the organization is strong enough to attract the right employees. The key, is focus and project that mission and values to their target recruiting pool.
- Assessment: Who should be eligible for the rewards? What kinds of behaviors or values are to be rewarded? What type of rewards will work best? How will the company fund this? Assessment Assess your current benefits and compensation system and determine the effectiveness of those systems in helping your company reach their goals. Design Evaluate different rewards programs how they will effect employees. Employee surveys are useful in identifying what employees value Execution HR implements the program, communicates the changes and trains management and key decision makers on how to measure achievement and help employees understand what’s necessary to obtain the rewards. Evaluation Measure the results (employee surveys) see what’s working and what’s not – evaluate what needs to be modified. Questions to ask: Have you conducted exit interviews or stay interviews? If so, what were some of things employees valued? What are the biggest challenges to hiring or retaining employees? How does the Organization compare to others in your industry? What do we see as our biggest threats to our company in the next 12,36,60 months. Accurately determine and size your total investment in workforce programs to ensure it’s in line with both financial realities and business needs. Improve your value-to-cost relationship by allocating the desired total investment across your portfolio in ways that drive the right employee behaviors. Create a framework that adapts quickly and efficiently to changes in your business strategy and workforce composition over time, and across countries and employee segments.
- Identify why the total rewards experience is superior to other organization (e.g. compensation, benefits, work-life, performance and recognition and training and development) When an employer aligns with an employee’s personal values and they are in the right role, employee loyalty grows. Continue to reinforce and incorporate your employer value proposition in your recruitment and retention programs.
- Company Surveys are great ways for employers to identify what employees value the most.