How to design next-gen rewards and benefits programs
Today’s workplaces are multi-faceted, thanks to the diversity of the people coming together to work. The blurring of boundaries due to globalization and technology advancements has helped bring in employees from various ethnicities, nationalities, genders, generations, cultures, etc.
With diversity becoming one of the central pillars for talent management, it is all the more critical to align peoples’ personal values and motivations with the organizational mission and vision. This calls for a robust and flexible people process, so each employee is able to articulate “what’s in it for them?” And they’re motivated to deliver their best. One process that has a direct impact on employee motivation and engagement is Total Rewards.
A study by Willis Towers Watson showed that roughly half of the employers (49 percent) indicated that new work arrangements necessitated a hybrid reward model. At the same time, more than half (57 percent) employers expected a reduction in real estate expenses, and a third (36 percent) expected a reduction in commuting expenses. These trends indicate that there is a need for a rewards reboot.
A future-forward benefits program?
Total Rewards brings together monetary and non-monetary philosophies to drive the desired employee behaviours. While monetary compensation is an important motivator, in recent times organizations have seen non-monetary benefits take on renewed importance to motivate people. For example, the pandemic highlighted the importance of intangible benefits, as people were suddenly expected to perform in extenuating circumstances.
Today’s generation values different aspects of life and work. To meet the expectations of this modern-day digital-native workforce, HR professionals must rethink and rejig the benefits offerings so that they can attract, engage and retain the right talent.
Benefits to consider
When curating an employee benefits program, rewards professionals must first understand the nuances of diverse life and career stages of their employees. Here are some intangible, but invaluable benefits that may work well with modern-day employees:
- Subsidized insurance: The post-pandemic world has reiterated the importance of medical care support, and a great health insurance plan for employees and their family has regained much value. Not only for the employee and immediate family, but subsidized options to include extended family is a great way to show that the company cares for the employee and extends financial support in times of need.
- Learning and development: Providing digital natives a rich learning experience to progress in their careers is a must-have. New-age employees expect a Netflix-like learning experience, hence L&D must invest in anytime-anywhere learning media that uses tech-driven engaging formats that leverage artificial intelligence, microlearning, gamification, virtual reality, augmented reality, and mobile learning.
- Health and wellness: The pandemic has brought health and wellness to the forefront in talent management. Having healthy employees is beneficial for the organization as healthy employees are less likely to remain absent. Organizations must invest in health initiatives and wellness platforms, which encourage employees to prioritize their physical and mental wellbeing. Financial assistance for buying ergonomic furniture or anti-glare screens is a great idea for virtual workers. Initiatives that encourage employees to reach a goal of steps per day can create a buzz around health and wellness can create great participation.
- Financial wellness: The emotional wellbeing of an employee depends not just on overall wellbeing and relationships; it is also affected by financial conditions. Employee assistance programs can provide access to emotional support for employees. Financial advice and assistance can help employees plan better for their financial security. Support and interest groups can go a long way in bringing employees together.
- Work-life integration: With the pandemic and the rise of work-from-home, working quickly became a 24*7 phenomenon. In a bid to help employees strike a balance and to add a personal touch to a virtual working environment, many organizations started giving additional time-off and conducted virtual fun catch-ups. Young millennials and Gen Z often attach much value to personal experiences other than work, hence it is good to incorporate flexible work arrangements that help them integrate work and life, such as virtual working, flexi-hours, additional optional time off, etc.
- Diversity and inclusion: Younger generations believe in bringing their entire authentic selves to the workplace. They want to be respected and recognized for who they truly are as human beings, and not just as employees. Hence it is becoming all the more critical to uphold diversity and inclusion through targeted participatory initiatives and programs. For example, Women employees, LGBTQ+ employee groups. Companies are can conduct audits of their total rewards practices to ensure that there is no bias or pay inequities. They can also consider metrics to reward achievements in diversity, inclusion and talent development.
It is human nature to be intrinsically motivated at work when one’s personal values align with the organizational values. Hence, HR and business leaders must work towards building a core, compelling and authentic culture that resonates with the employee mindset and must communicate this culture periodically.
Flexibility, choice, and transparency will become the core of the modern-day benefits construct. Now is the time to move away from “one size fits all” and provide employees freedom and options to choose. Rewards leaders must understand the pulse of the employee and the business strategy, and find synergies between the two. Using technology is one way to enable employees to make selections suited to their professional and personal preferences and to espouse openness and transparency. For example, a rewards platform with a basket of benefits to choose from, combined with a flexible rewards structure can help employees feel empowered in their rewards decisions. This must be complemented with the right governance measures to ensure checks and balances happen. It is important to balance the cost impact with unrealistic employee expectations. A sustainable Benefits decision does not stem merely from the Rewards or HR function but is a core business decision.
This article is part of a series on preparing for a flexible future of work in partnership with Zimyo.