According to the latest estimates from the Bureau of Labor Statistics, a 3.7% unemployment rate and 7.1 million job openings make the current job market a robust one. And as a result, it’s creating fierce competition for qualified candidates—many of whom already have jobs and are testing the waters to see if something better is out there.
The employment forecast is one of the biggest reminders that compensation alone is still no longer enough for businesses to compete for talent. While financial compensation will always be an important factor in attracting employees, it remains just one piece of the highly individual but often nebulous puzzle that everyone calls total rewards.
Last year, I reflected on the fact that in a post-demographic world, benefits experiences need to be improved for everyone: one person at a time. This year, I find that still to be true, but in an even more urgent fashion. For qualified candidates to settle into a fulfilling job and comfortable work/life success today, a total-rewards program that’s as specific to your workforce as it can be is especially critical now.
Whether you’re starting a new business or growing an existing one, the following pillars can help you refine your total-rewards strategy in this competitive labor market:
Pillar #1: Recognize what this can do for your business
It’s no secret that people are finding it harder and harder to separate the growing commitments of their jobs from everything else in their lives. That said, the level of support people receive from their employers can have positive impacts on their health, financial security, ability to care for their families, and a host of other aspects. The right total-rewards package not only contributes to a sense of personal satisfaction and quality of life, but also helps people navigate and succeed in a constantly evolving world.
Laws and processes change, new technologies proliferate, and conventional wisdom fast becomes outdated. But the company-sponsored lunches every Friday might be that one perk that compels good employees to stick around, because those gatherings foster connection and camaraderie. Such opportunities for team morale are exceedingly harder to find in today’s digitized society, abundant with remote workforces, and employers who close that gap create a particularly attractive offering for job candidates. Again, it’s about paying attention to our evolving world and the evolving needs of employees.
Since many people are feeling that the boundaries between work and life are porous, it’s time to take it a step further and recognize how the right rewards can make the difference between someone just doing a job and a valued team member nurturing a career—and what that can do for your company as a whole.
Pillar #2: Understand the limitless nature of the components
Medical and dental benefits are valuable, and retirements plans are needed, but there’s a lot more to consider than traditional benefits categories when developing a package of perks. Even more so, today, because although more employers are aware of total rewards, 80% are “significantly lagging” behind their employees’ expectations.
Take advantage of these unique circumstances so your company can meet those expectations accordingly. Start by:
- Defining what makes your company’s culture special. It could be an emphasis on community service outside work, continuing education and professional development, or team-building opportunities. Then, allow your total-rewards mantra to carry over into that culture.
- Listing all the ways you currently show, or aspire to show, appreciation to employees—whether it’s extra paid time off, cash bonuses, company-sponsored outings and events, or other forms of recognition.
- Putting yourself in the shoes of your employees and thinking about what would make their lives easier, such as discounted gym memberships, onsite childcare, or pet sitting.
Together with traditional benefits like health insurance, 401(k)s, and FMLA, the unique components of your total-rewards program need to show employees and prospective job candidates how they will be supported. Prove you’re no stranger to the newest trends and possibilities, such as student-loan reimbursement or employer-sponsored financial training.
Pillar #3: Connect total rewards to your employee value proposition
Finally, take into account your employee value proposition. You’ve likely already tapped into this when identifying your unique components, but we advise digging a little deeper into what those components mean.
When job candidates consider your company, be candid in what they can expect to get out of this experience, including:
- Opportunities to grow and move up in the company
- Support from managers and other leadership
- Ability to achieve that all-important work/life success
Your total-rewards program needs to be aligned with your employee value proposition and relevant to your workforce. For example, if you commonly speak to the importance of family care, then flexible work hours and locations can give employees more freedom to get their work done while still meeting the commitments of their daily lives. It could allow them to drop their kids off at school in the morning before making it into the office, or to work from home twice a week to be closer to an elderly family member.
If you promise career development to new hires, consider offering a mentorship program that helps them move up within the company at an accelerated pace, or education reimbursements if getting a certification or graduate degree would help build highly sought-after skill sets your company needs.
Or, reflect a commitment to responsive management and leadership through monthly or quarterly town halls, free of hierarchy where employees of all levels can speak openly together about wins, losses, challenges, observations, and opportunities, and share ideas about how to strengthen the business.
Let’s say your employee value proposition centers around one main idea—perhaps it’s environmental friendliness and sustainability. You can attract candidates who share that same value by rewarding those who bike to work or take public transportation, offering a ride-share program, or giving additional volunteer time off (VTO) to those who participate in highway cleanups or recycling drives.
The idea is to create a self-reinforcing environment where your values draw in engaged employees who further deepen those values—and feel a stronger sense of commitment to your company as a result.
Though it’s difficult to predict what will happen with the labor market down the road and how competitive it will remain, developing a unique and specific total-rewards program is more than just an answer to staffing challenges in the short term. It’s a way to connect on a deeper, more meaningful level.
That connection can be achieved by offering benefits that both reflect the company’s culture and align with the needs, goals, and values of its employees. This kind of personalized benefits experience helps improve employee retention and increase engagement, during the most competitive of markets and beyond.