Maximizing talent: How total rewards strategies drive recruitment and retention

In today’s market, a competitive salary alone is no longer enough to attract and retain top talent. By investing in a holistic total rewards strategy, you can elevate your company’s appeal and showcase your value with a holistic benefits package that aligns with your culture and resonates with both prospective and current employees.

What is a total rewards strategy?

A comprehensive total rewards strategy includes all of the tangible and intangible benefits an employee gets while working at your company, such as compensation, traditional and voluntary benefits, and non-monetary perks like remote work options. When thoughtfully designed, the right package can make your company more attractive to potential employees, and ensure your current employees feel valued, supported, and excited to come to work every day.

What does a total rewards package include?

Total rewards packages vary from company to company, but can include:

• Compensation: Salary, hourly pay, bonuses — anything that brings more money into your employees’ pockets counts as compensation.
• Traditional benefits: Medical, dental, and vision coverage should be the backbone of your rewards package.
• Ancillary benefits: Pet insurance, adoption assistance, and other unique benefits further help your employees feel valued and supported, fostering long-term loyalty.
• Voluntary benefits: Life insurance and disability coverage can make a real difference in times of need for employees and help them feel covered for the future.
• Tax-advantaged accounts: Retirement accounts like 401(k) plans are the most sought-after benefits after health insurance. Health savings accounts (HSAs) and flexible spending accounts (FSAs) are also popular employee offerings.
• Equity: Giving your employees stock options or restricted stock units (RSUs) can boost their engagement as their financial success becomes tied to the company’s performance.
• Time off: Don’t underestimate the value of vacation time, sick days, mental health days, and parental leave.
• Workplace flexibility: A recent Deloitte survey found that 94% of professionals benefit from flexible work arrangements. If your company offers hybrid or remote work options and your competitors don’t, this can help move the needle when it comes to your recruitment and retention strategy.
• Career development: A Harvard Business Review study found that employees are more engaged and productive when their employer supports their professional development with additional training programs, internal growth opportunities, or stipends for further education.
• Student loan repayment: This is a reward that can really help you stand out, considering only about 5% of workers had access to student loan repayment benefits in 2023.
• Wellness initiatives: From gym memberships to meditation apps, healthy employees are happy employees. Wellness benefits can easily create a long-lasting impact on your team’s overall satisfaction and well-being.

What’s the difference between total rewards and total compensation?

Total compensation includes monetary rewards like salary, bonuses, and the dollar value of certain benefits, whereas total rewards include non-monetary perks like career development and work-life balance options.

Although total compensation might be the first thing to catch the eye of a potential new hire, a holistic total rewards package goes far beyond, fostering a supportive company culture that keeps employees happy and loyal for the long run.

How can total rewards strategies drive talent recruitment?

You may not have been thinking about a total rewards package yet, but you can be sure that many of your employees and potential hires are. A 2024 Maven report found that more than half of all employees would change jobs for better benefits.

Here’s how to make sure your total rewards strategy is your best recruitment asset:

1. Highlight your unique benefits: Sure, you offer medical and dental insurance, but so do  90% of companies. What makes your benefits stand out? Maybe it’s your hybrid work options, wellness benefits, or generous 401(k) match.
2. Make benefits benchmarking a regular task: How can you compete if you don’t know how you compare to others in the industry? Research what your competitors are offering for benefits packages and talk to your broker about how you can start benchmarking your benefits to ensure you stay competitive in the market.
3. Tailor your offerings to the right talent: 52% of millennials say they’d take a 20% pay cut in exchange for better benefits. Different generations and workers across industries value different benefits and perks. Make sure you know what your ideal candidates are looking for in a comprehensive benefits package.

How can you use a total rewards strategy to retain great employees?

A strong total rewards program can help you attract new hires and keep them satisfied year over year. This is important for reducing hiring costs, as replacing an employee can cost up to three times their annual salary.

Here’s how to use your total rewards strategy to keep your best and brightest employees:

1. Keep your finger on the pulse: Knowing what your employees want will make retention much easier. Regular benefits surveys help you understand what they value most.
2. Diversify your offers: Employees in different stages of life value different benefits. New parents will most likely prioritize parental leave over professional development opportunities, while the opposite might be true for next-gen professionals.
3. Be transparent: The last thing you want is for your employees to not know about or understand their benefits. Making sure your team understands what their total rewards package can do for them helps increase their satisfaction and well-being.

Where do employee benefits fit into your total rewards strategy?

On average, benefits make up 31% of an employee’s total compensation, while salaries and bonuses make up the rest. Considering an average salary of $60,000, benefits cost an average of $27,000 per year per employee. However, creating a great total rewards strategy doesn’t have to break the bank.

A benefits broker will help you design a strategy that maximizes the value for your employees while keeping the cost down for your company, ensuring a win-win situation for everyone.

What’s the best way to highlight your total rewards strategy?

Your total rewards package is only as good as your communications about it. Many employees don’t fully understand or appreciate the value of their total rewards package.

Strategies to highlight your total rewards package:

• Communicate regularly and often, not just during open enrollment.
• Use dollar amounts to show the full value of your offerings.
• Use multiple channels to communicate your company’s benefits with your employees.
• Hear directly from your team about what they want and don’t want by offering employee benefits surveys often.

Your total rewards strategy is ultimately a reflection of your company’s values. Focus on a holistic package with competitive benefits and other non-monetary perks to attract new hires and keep your current workforce engaged, productive, and satisfied year after year.

Ready to see the power of a strong total rewards package?

Let’s talk about how Nava can help you design a benefits package that keeps your employees happy and productive.

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