It’s no secret that the pandemic has turned our economy, and other aspects of society, on its head. While the situation is fraught, it does offer an opportunity for organizations to examine and, if and where necessary, “do over” their total rewards strategy and employee experience.
Today’s environment portends more changes to come, so it’s vital that organizations up their agility quotient, as well as their ability to maneuver through uncertainty. Here’s what you need to know about employee compensation in a post COVID environment.
There’s more pressure than ever on organizations to put in place fair and transparent compensation practices that are in line with what other companies, particularly in your industry, are doing, so that they can recruit and maintain top-shelf employees and have an invested and productive workforce. Now that COVID-19 has tossed a wrench into best-laid plans, now is a chance to get it right. And that means best rewards strategies that are based on data and analytics.
What Is Meant by Total Rewards?
It’s the mix of wages, benefits, and rewards employees get from their company. This means pay and bonuses plus career opportunities, workplace flexibility and any recognition.
What is a Total Rewards Strategy?
It’s the system put in place by an organization that provides rewards – money, benefits, and growth opportunities — to employees for their membership, commitment, and contribution.
The basic categories of rewards are:
- Compensation. In addition to your base salary, this includes incentive cash as well as recognition.
- Benefits. This refers to items such as medical care, paid time off, retirement, and work/life programs and the like.
- Personal growth. This means career development, opportunities for advancement, training and development, performance support, etc.
- Work milieu. Here, you have your organization’s culture, the reputation and image of your company, and your company’s policies. This category also includes the work itself.
Reinventing Your Rewards Strategy
Organizations that are focused on the future are undoing tacit rewards rules and rewriting them. They’re switching to a more holistic, purposed-based total rewards strategy and way of managing talent. While this has been occurring for a few years now, the economic upheaval caused by the pandemic has accelerated changes to the total rewards model.
Added to all this is the fact that it takes more than employee compensation these days to lure and keep good talent. You need to enhance your view of total rewards with a greater emphasis on aspects other than wages. Employees want to feel valued, have opportunities for growth, and feel like their work is contributing to the bottom line of an organization that they believe in. It’s all about the employee experience.
What Mercer Can Do to Help
The HR consulting firm can assist organizations in employee attraction, retention, engagement, and motivation. How? You ask. Here’s how:
- Establishing an analytics-based total rewards strategy. Data is used to understand your workforce, fill in skills gaps, and fortify employee engagement and retention.
- Creating more agility through a career framework and position architecture. The framework would be linked to crucial HR processes and would have the agility to shift gears as needed, thanks to a job-architecture that matches pay and benefits with positions, labor markets and career paths.
- Maximizing ROI. Mercer helps promote flexibility and inclusion with the remote and digital models that are currently so pervasive, which results in a more flexible and productive workforce.
Dealing with compensation in a post-COVID environment is tricky … but look at it as an opportunity to get things right. Some current business models have been forever upended, so now’s the time to build in the flexibility and holistic perspective needed to adapt to these changes. Your organization’s total rewards strategy is a good place to start.