Employee expectations have shifted over the past 18 months and people are demanding more from their workplace. Patterns of working have changed with the Covid-19 pandemic, but also racial injustice, gender disparity and the effects of climate change have become more prominent within the social consciousness.
People want their employers to be aware of these issues – to know what is affecting them and their co-workers, and ultimately to be more responsible.[1]
Reassessing total reward, which is the holistic package offered by businesses to their employees, is one way employers can address these issues.
A recent Aon report called The Future of Total Rewards said that a higher value of total reward increases employee engagement by 33%.[2] It can also increase the perception of how people are valued by their employer.
So, how can employers reassess their total reward to create a more inclusive workplace?
Be flexible
With more diversity in the way people are working, flexibility for a total reward package is a necessity.
A global HR Pulse survey by Aon found that 86% of companies are creating or are considering an update to their remote working policy post-Covid, while nearly half of businesses expect only three quarters of employees to return to the office once the pandemic is over.[3]
Beyond Covid, a 2020 Pulse survey by Aon found that 76% of companies had adopted flexible working hours for employees with young children.[4] With a rise in the sandwich generation, where employees have caring responsibilities for both older parents and young kids at the same time, it is likely this shift towards flexible working will continue.
Therefore, businesses should consider this in their total reward offering in order to retain talent and maintain a diverse staff team.
This flexibility could be in the breadth of rewards offered, the structure of the programme, or even how they’re delivered to employees. It’s about choosing what works for the employees in a particular organisation and knowing that there will be different needs within the workforce. For example, there could be tiered benefits depending on seniority, life stage or work environment needs.
Flexible benefits packages that can be personalised are already available, but new technology has made this even easier for employers, ensuring total reward can be adaptable.
Be equitable
There has also been an increased focus on diversity, equality and inclusion (DE&I) over recent years. Nearly half of organisations currently have DE&I metrics, while another third are intending to create them. [5]
This is important for organisations because it increases perspectives within the company, but also diversity attracts more diversity. In a recent survey, 80% of women, 80% of black, 75% of Asian and 80% of Latino respondents stated that diversity was important in making employment decisions.[6]
In terms of total reward, this means ensuring different ethnicities, abilities, religions, ages and backgrounds are given equal footing across the benefits offering.
An example is ensuring pre-existing health conditions are not a barrier to a health plan design or having a separate additional fund to support additional health coverage if needed. Another would be to look at financial health and make sure those of under privileged or disadvantaged backgrounds are considered in plans.
However, it’s often not just employees that are searching for evidence of this. Regulators and shareholders are also demanding more data on environmental, social and corporate governance metrics. This means that effective total reward will not only reflect an equitable and inclusive design, but also identify metrics and goals to monitor and work towards to ensure future inclusivity.
Be aligned
The best total rewards strategies will enhance a business’ talent strategy. Aligning the two will help attract and retain the best talent for them, as well as improving employee engagement.
If the talent strategy is to retain the top performers, then total reward can help do this through multiple ways including providing a competitive package or by linking total reward to the organisational performance.
As we have already seen, diversity is a factor considered by many when making employment decisions. So, if the talent strategy is to have a more diverse workforce, then the total reward package must be inclusive. They need to reflect each other in order to attract the right employees for that organisation.
But a total reward package does not need to be everything straight away. It doesn’t even need to be providing the most. The competitive advantage could be in the inclusivity and flexibility of the package, or it could be effective communication which showcases the benefits of the offering.
Whatever unique offering is chosen, employers first need to look at their own workforce and talent strategy to determine their employees’ needs and the key goals of the package. From there, employers can build a tailored, inclusive offering.
Want to find out more about the future of Total Reward? Download Aon’s latest employer guide now.
[1] Aon Diversity, Equity and Inclusion in the Workplace report, p11
[2] The Future of Total Reward, p2
[3] Aon Global HR Pulse Survey #7 – Preparing For the Future: How COVID-19 is Changing How and Where People Work Forever
[4] Aon COVID-19 Pulse Survey #3, May 2020
[5] Aon Global HR Pulse Survey #7 – Preparing For the Future: How COVID-19 is Changing How and Where People Work Forever
[6] https://www.glassdoor.com/blog/glassdoors-diversity-and-inclusion-workplace-survey/
