The Evolution of Total Rewards

total rewards

You’ve no doubt heard of Moore’s Law; the theory that states the speed of computers will increase every couple of years. Well, whatever the Moore’s Law equivalent for Human Resources is, we’re living it right now.

Back when I started, the concept of “total compensation” was just emerging. There wasn’t a dedicated “total rewards” position in the department, and an “attractive” offer included a reasonable salary with health benefits (referred to as fringe benefits).

Since then, I’ve seen companies add everything to their employee rewards programs and candidate offer packages from philanthropic opportunities, tuition reimbursement, pet insurance to flexible vacation and generous parental leave policies. Why? All in the name of attracting and retaining top talent.

Change Is Coming

Let’s stop for a moment to consider some numbers. Microsoft recently reported that 40% of employees in the global workforce were planning to change jobs after the pandemic. Even if that number is off by half, that’s still 1 out of every 5 employees in your company who are going to leave. To view that through the HR lens, on average, it costs 6 to 9 months of an employee’s salary to replace them (SHRM). Add it all up and HR departments everywhere are facing a huge problem.

Attracting and retaining great talent have always been the top priorities for companies the world over. But they’re often the most challenging tasks the HR department tackles—especially now. It’s a job seeker-friendly market and your potential candidates are expecting more than basic offer letters or once-per-year total compensation communications. Employers must think differently about their recruiting and retention strategies – and the most progressive companies are relying on marketing to help them set their organization apart.

Shifting the Paradigm

Beyond compensation, I’ve seen companies try showcasing the myriad programs they offer or tapping into the trend for philanthropy, work-life balance, and clear career path options. But getting employees to care about any of that is going to require something of a paradigm shift. That’s when an idea hit us: what if we thought of our candidates and employees as customers?

Stay with me on this. If you think about the intersection of attracting new candidates and retaining them once hired, a large component of that is engagement. The same way you might get coupon reminders from Target or alerts about new programs at your gym, that’s the kind of engagement we should be aiming for. With employees as customers, total rewards become total rewards marketing.

We’ve seen companies like A+E have a lot of success treating their total rewards this way. With more than 1,400 creatives employed worldwide, keeping everyone engaged and fulfilled is paramount to the success of the network. Vice President of Total Rewards at A+E, Geraldine Potts, put it very succinctly: “timely communication and transparency are key in HR.” The evolution from hand-delivered paper statements once a year to an online platform ensures their distributed workforce has 24/7 access to valuable total rewards information, new program rollouts, and company announcements.

The Future of Total Rewards Marketing

Having been in this space for over 25 years, I’ve seen firsthand the hard work that goes into developing new programs and introducing new incentives to a workforce. I always feel the sting of disappointment when these endeavors aren’t met with the fanfare they deserve. But engaging employees with a marketing approach where these new benefits are the focus, and the employee is the customer, could be the answer.

What’s more, by thinking holistically about total rewards as a marketing exercise, companies can greatly support managers in both hiring and retention by creating a more compelling case for the company (especially as a significant portion of a company’s workforce plans to make a job move post-pandemic).

As marketing technology has become more sophisticated, the best total rewards programs have leveraged those same features to inform, layer and measure their programs and the adoption of them. Technology in the total rewards space has pushed the discipline light years ahead of its humble beginnings of static printed letters. Now, it’s a fully customizable platform that can be updated to reflect the latest company rollouts, all the great intangibles, and most up-to-date rewards values. And where managers might’ve had just a few days carved out every year to meet with their employees and deliver total compensation statements, technology now enables them to make their employees’ total rewards information available anytime.

In my work with TotalRewards Software, I’ve been lucky to witness the evolution firsthand. Recruiting and retaining talent, especially in hard-to-fill roles, has never been more challenging. But as this Moore’s-Law-esque HR landscape continues to evolve, embracing an interactive marketing approach to total rewards is an exciting next step and one that I believe can make all the difference for companies and their employees.

Ray O’Donnell is the founder and CEO of TotalRewards Software. To learn more about effectively marketing total rewards to employees, executives and candidates, get a free trial of TotalRewards Software today.

Offer Letters: Where Applicant Tracking Systems Fall Short

offer letters

Applicant Tracking Systems (ATS) have been aiding HR departments and hiring managers for years. From helping to filter out bad-fit applicants to keeping track of the entire bureaucratic hiring process, ATS seemingly does it all.  

Except for one area: the offer stage. 

Offer letters are one of the most vital steps of the initial employee experience. At this stage, HR and hiring managers have made their decision to hire an individual, and the offer letter needs to stand out to ensure that the organization is attractive enough for the individual to sign and join the team.  

In other words, a poorly designed offer letter that doesn’t succinctly and accurately explain an employee’s total rewards in an easy-to-digest format can lead to individuals passing on the offer, which means all that time spent interviewing and vetting becomes wasted.  

To attract top-tier talent and ensure that they make the jump from candidate to employee, offer letters need an upgrade that goes far beyond what ATS does right now. 

2021 Overview: Attracting and Converting Top Talent 

As the economy recovers from the impact of COVID-19, many organizations are entering (or are already in) growth mode. Merger and acquisition deals, for example, that were stalled during 2020 have spun back to life. Capital investments are on the rise across the US. Remote work is becoming the new normal with hybrid and dispersed teams opening brand new candidate pools that aren’t geo-locked. And all of this means one thing: organizations need top-notch talent, and they need it yesterday. 

So how does an organization attract and then convert the right people to meet their overall talent strategy? They start by having a smooth, transparent interview process that helps both sides decide if they are a good fit for one another. This culminates in making a great offer that not only contains competitive compensation plans but also in-demand perks, unique benefits, healthcare details, and much more.  

Organizations that pull together great offers already understand the value of employer branding and how having amazing scores on sites like Glassdoor can impact not only today’s talent but future teams as well.  

So Why Are Offer Letters Still So Dull?  

If interviewing is dating, offer letters are a marriage proposal. They carry immense weight right at the finish line of the hiring process while also acting as the first true, official onboarding step. This initial phase of the employee experience is vital if organizations want top talent to convert from candidate to employee.  

While there have been many improvements to the way that interviews and the actual onboarding process occurs, offer letters are still typically generated as lengthy, wordy PDFs that aren’t as engaging as the other steps in the process. 

In today’s world, candidates lead the process more and more, especially if they are truly skilled workers who can essentially select where and who they work for. By having a blind spot during the candidate experience, organizations may fail to close on the talent they so desperately need to attain. 

What’s the Solution? 

Simple: treat your candidates like customers by delighting them at closing to get them across the finish line. CandidateRewards makes it easy to do just that by helping you turn your offers into an engaging experience that showcases all the reasons why you are an employer of choice. 

With CandidateRewards, your offer letter can be transformed from a PDF email into a full-fledged website that’s specifically designed for each candidate, allowing you to fully explain rewards while engaging candidates in a new and exciting way.  

Instead of telling candidates your full value proposition, show them. On the CandidateRewards platform, individuals can play around with your benefits packages to see the full value you offer. They can also see video content from executives, understand your mission and core values, and much more.  

By turning an offer letter from just that, a letter, into a complete experience, organizations can convert more candidates into new hires, kicking off the employee experience with a bang that will resonate long term.  

Besides closing top talent faster, CandidateRewards also gives HR leaders and hiring managers insights into how engaged a candidate is by offering real-time data and behavior analytics that provide actionable items to make offers better and better into the future.  

Wrapping Up 

In today’s talent market, candidates are empowered more than ever, a fact that is further compounded by the “Great Reopening” that has followed COVID-19, which has created a talent vacuum where roles are harder and harder to fill.  

In short, attracting top-tier talent is now a top concern for employers. This has led many to renew their focus on the overall employee experience, employer branding, and attractive benefits programs that are designed to make organizations employers of choice.  

Despite this, many still have a major blind spot that isn’t covered by their next-gen ATS platforms: the offer letter.  

Making an attractive offer letter can seriously impact talent strategies by helping organizations close top talent faster and convert them into the onboarding stage of the employee experience while also helping to negate the chance of a rejected offer that can restart the recruiting phase, costing organizations more and more with every cycle.  

A simple, next-gen solution to this issue is turning the offer letter into an experience. At CandidateRewards, we do just that. We’re here to help your organization land and retain top talent by ensuring that your candidates fully understand the value proposition extended to them.   

Learning and Development to Increase Retention

Most companies would choose to invest in ways to enhance employee retention over hiring and training new ones. The process of replacing employees can be expensive. You have to spend time and resources on finding, interviewing, and acquiring the best talent out there. When you already have quality employees, it is much more cost-effective to find ways to keep them. One of the most essential ways to improve long-term retention is to build a culture of learning and professional development.

-According to a 2015 Payscale report, 57% of employers place employee retention as a top priority.

Executives and managers need to be ready to adapt to the needs of their employees. This process starts at the very beginning. For example, it might seem like a good deal if you can negotiate a new employee’s salary under market value. However, this can come back to bite you when they leave for a better offer, taking the training and experience you provided with them. There are several strategies and methods you can implement that will boost your retention and employee happiness.

Ways to Develop Higher Employee Retention.

  • Hire Correctly: A significant portion of companies lose employees in the first 120 days of employment. Your human resources personnel need to keep this in mind when hiring. The culture and requirements of the position need to be made clear. Shrouding the negative aspects might seem like a shortcut to getting someone hired, but it won’t result in long-term employment.
  • Embrace the Referral Process: Referred employees have some of the highest retention rates in any industry. This is partially due to the fact that your current employees already understand what the job needs and the type of people that could fill a position. Referrals act as a free screening process. Employees are also less likely to refer someone who is a poor fit because it could reflect poorly on them.
  • Don’t Get Too Comfortable: In a busy workplace, workers who require more supervision often draw more attention. Your employees who struggle less still need your attention, however. Not being recognized can lead to feelings of resentment, so don’t underestimate the power of encouragement or recognition.
  • Check-In with Your Workers: Establish regular times to check in with your employees. Discuss their goals, challenges, and triumphs. Find out ways they think things could be improved and be willing to listen. Employee engagement will also foster retention.
  • Don’t Hide: Many leaders fear to be transparent. The truth is that this can lead to workers feeling like they are lied to. Build a culture of teamwork by offering transparency on how your company is succeeding. Be honest about what can be improved and recognize those departments performing well.
  • Follow Through: When you make promises to your employees make sure you can back them up. This is true for raises, bonuses, or even day-to-day operations. Following through on your promises build a relationship of trust between you and them. Companies that foster trust and partnerships with their employees have shown higher rates of retention.
  • Develop a Culture of Learning: When you bring all of these strategies together, you will see a workplace where employees know what is expected of them, feel equipped to succeed, and see room for growth. Employees will stay at a job if they see a future there for them.

Providing a future for your workforce means understanding their needs and finding ways to deliver them. Building a culture of retention starts with hiring the right people, rewarding their success, and fulfilling your promises to them. Today, a business leader needs to be willing to learn and grow along with their labor force.