When economists and historians harken back to this period that began about two years ago, when the pandemic first appeared, they will no doubt record it as a time during which the business world had to face unprecedented instability and disruption.
For one thing, employees began seriously rethinking, and on a broad scale, how and where they wish to work. That and other factors related to COVID-19 have organizations scrambling for agility and non-financial ways to attract, motivate, and retain talent.
On top of that, employers are increasingly being asked to tie total rewards to efforts, such as equity and diversity that help improve society. So, now, here’s what you should know about reinventing rewards to fit the post-pandemic workplace.
What is Meant by Total Rewards?
Total rewards include all the compensation, benefits, and rewards an employer provides their staffers. Besides wages, total rewards comprise everything from recognition and career growth opportunities to a constructive and favorable work environment.
Essentially, total rewards are anything the company provides in exchange for a given employee’s membership, contribution, and commitment.
Explain More About Total Rewards Categories
There are a few key elements of total rewards. Those include:
- Pay. This means all pay: base wages plus any bonuses or incentive pay.
- Benefits. Benefits include group healthcare benefits plans, retirement plans, paid time off, and work/life programs and the like.
- Personal growth. This includes elements such as training, career development, and performance support.
- Work environment. This can run the gamut from an organization’s image and leadership to its policies, culture, and affiliations.
How are COVID-19 and Social Change Realigning Compensation?
It’s true: even before the pandemic came along and upended everything, organizations in the U.S. and abroad had already begun rethinking their total rewards strategy. To wit, they had already begun zeroing in on new ways to consider compensation, reshaping performance and incentives based on multi-stakeholder models, and sharpening their focus on ESG – environmental, social, and governance issues. They also were turning more of their attention to skills evaluation, pay transparency, and the importance of employee experience in setting total rewards.
And now, as we’ve mentioned, people are reevaluating how, where, and even when they want to make a living. Moreover, issues surrounding diversity, equity, and inclusion have come to the fore.
What the pandemic has done is speed up, realign, and shift organizational priorities to address the developing needs of this new world.
What are Some of the Key Issues that Will Shape Total Rewards?
The future of total rewards can be condensed to a handful of key issues including flex-work and how that relates to compensation and employee experience.
Employers are also increasingly examining the affect of skills on base pay and raises and are looking at how to set goals during all the ongoing disruption caused by the pandemic.
In addition, rising stakeholder pressure concerning ESG and diversity, equity, and inclusion are leading enterprises to rethink their DEI approach and to link executives’ compensation to their actions in that space.
Also, gone are the days when dealing with pay equity was mostly an exercise in compliance rather than a true cultural shift based on data and analytics. This is a new day, indeed.
Owing mainly to the pandemic, a nice paycheck is no longer a slam-dunk in terms of attracting and maintaining talent, planning, budgeting, and aligning rewards with social change. Reinventing rewards to fit the post-pandemic workplace is a must and requires help — if you want to do it right. We recommend the consultant Mercer, which has the expertise and breadth of experience to pull it all together for you.