What comes to your mind when you hear the terms “rewards” or “compensation and benefits”? Do you think of leave entitlement? Bonuses? Allowances? Perhaps insurance as well?
Why does HR tend to associate rewards with only the tangible items? Is that really all that is available? As an HR practitioner, you know that you are often constrained by resources. This means that as much as you love to give all the best rewards and benefits to your employees, it’s not financially viable. That also means that it becomes increasingly challenging for you to use rewards as a competitive edge when it comes to winning the talent war. Or is it?
Perhaps it’s time to re-look at this all together.
Instead of seeing it as compensation and benefits or total rewards, let’s consider Total Value instead. What do I mean? Let’s explore further.
Different generations, different needs
We are currently seeing three main groups of people at the workplace today – Baby Boomers, Generation X and Millennials. Though we recognise that they have some similarities, there are differing needs as well, primarily due to their varying life stages.
For instance, a Baby Boomer may be more concerned about health and stability. This means that they will probably be more interested in having better insurance coverage and job security. On the other hand, millennials who are young typically do not worry that much about their health at this stage. Their focus might be more on their lifestyle expenses where they enjoy travelling or purchasing new tech gadgets.
This means for one, some flexibility has to be built into the rewards system. That’s why companies have flexible benefits. You can contain your budget while providing options to cater to the needs of different groups.
The different “currencies”
When you speak with employees in the market, how often do you hear them boasting about their tangible benefits like leave entitlement or insurance coverage? Instead, do you hear them complimenting how good their bosses are in terms of trusting them with big assignments or having flexibility to work from home, or even, having a nice workplace that allows them the option to move around without restrictions? This is where the total value concept comes into play, and that also implies that we need to consider the different “currencies” available that can be tapped on.
In a resource-constrained environment, how can you leverage on things beyond the tangible and standard list of benefits to provide a competitive package? Thinking from a value perspective might be one solution. That comes with an understanding of what your employees value but yet, may be of low cost to the organisation. Key idea here is high perceived value, yet low cost to the organisation.
Messaging and consistency
When designing your total value package for your employees, start of by first asking yourself, “What message do I want to send across?” Are you using the offerings to show that you are a top employer? Are you telling them that you care about their well-being? Or perhaps, do you want them to know that you also recognise that everyone is different and we are here to cater to your needs while you can focus on your work?
It really depends on the resources you have on hand and profile of employees within the organisation. But the bottom line is this: You want employees to know that they are valued and important to the organisation. With that in mind, you can always check back and assess if what you have designed actually makes sense or not.
There is no point in over-promising and stretching yourself too thin. Understand what you can offer, align it with your message, and be authentic about it. This will resonate with employees a lot more than simply throwing them with a standard set of benefits that at times, mean nothing more than a list to them.
With the talent landscape getting increasingly competitive, it is key to shift your mindset and ensure that you put yourself in a position to win the talent war. Understanding what talents value and what the organisation can afford is key. This comes in the form of appreciating the existence of the various generational needs, different “currencies” as well as the messaging that HR wishes to bring across when attracting the top talents. Move away from the concept of tangible rewards and start thinking of the total value that you can offer to talents in the market.
This article was first published on HRM Asia.