The burning question for total rewards professionals worldwide is: how can we design a total rewards strategy that resonates with the current workforce? The Coronavirus pandemic and broader economic shifts have transformed the definition of work and employees’ expectations.

But within these challenges lies an opportunity. This is the right time for organizations to realign their total rewards strategy with the changing preferences of employees and future-proof their talent retention efforts.

This blog post delves into four key trends that will shape the future of total rewards in the coming years.

The Personalization Imperative

The current trend points to one destination; employees do not find the “one-size-fits-all" total rewards impressive anymore. The generic benefit packages are lackluster because they prefer the benefits to be aligned with their financial goals, well-being needs, and their current life-stage.  

The need for personalization has aggravated due to the pandemic working conditions as remote work has become the new normal way of working. Employees want more autonomy and personalization in their rewards plan. They want to choose from a variety of options, such as student loan repayment assistance, additional vacation days, or health savings accounts.  

The Global Benefits Attitudes Survey 2022 by Willis Towers Watson, supports this trend by stating that 43% of employees prefer choice and flexibility when assessing their benefits.  

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The Need for Recognition

Employees want to be recognized for their efforts and they want it instantly. This is especially true for younger generations. A study by Gallup found that Gen Z and millennials are 73% more likely to say that they want recognition at least a few times a month as compared to older employees.  

Companies must be fast to rethink how they share feedback with employees and recognize them. As Gen Z comprise 27% of the total workforce by 2025, organizations must embrace a culture of continuous reviews. Traditional annual reviews and top-down recognition programs offer limited opportunities for peer-to-peer appreciation and public acknowledgment of achievements.  

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Stressing on Holistic Well-being

The future of total rewards will encompass more than compensation and traditional benefits. The theme will be a comprehensive approach that prioritizes employee well-being, not only in physical terms but also in mental, financial, and emotional well-being.  

The best way for companies to shift to a holistic benefits approach is by offering programs that promote financial planning workshops, stress management, and mental health resources.

According to the American Psychological Association’s 2022 Work and Well-being Survey, 81% of workers agree that how employers support health is an important consideration for them when they look for future work. It further states that flexible working hours (41%) and respectful workplace culture (34%) are the top priorities for employees’ mental health.  

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Financial Security is a Top Priority

Rising inflation and increasing living costs are putting tremendous pressure on employees. Organizations must take a progressive stance by incorporating financial wellness programs into their total rewards strategies.  

Companies like Patagonia are leading the change by offering college tuition reimbursement to their employees to promote continuous learning and personal development. Employees get the degrees and Patagonia gets a more skilled workforce.  

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The Data-Driven Future of Total Rewards

Total rewards will be the key to attracting and retaining talent. Organizations must focus on personalization, recognition, and well-being to future-proof their rewards strategy.  

But to create impactful and targeted total rewards programs, HR and compensation professionals must leverage data analytics. Analytics will give them insights into employee preferences and program effectiveness.  

Tools like Compport, have the potential to empower HR professionals to leverage data analytics at scale. It makes their job easier by gathering employee feedback, analyzing data, and making data-backed decisions to optimize total rewards programs.  

Ready to take your total rewards strategy to the next level with Compport? Book a demo today

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