Total Rewards are everything an employer provides to attract and retain a high-performing workforce. This includes the “harder” elements that come to mind immediately, such as salaries, incentives, and bonuses (cash compensation), along with long-term incentives and benefits (health, retirement, PTO, life/disability). However, it also encompasses “softer” investments in areas such as professional development (training, tuition assistance, mentorship programs), established career paths, and recognition.
An effective, well-executed Total Rewards Strategy will differentiate your company from competitors, enticing prospective employees to choose you (and current employees to stay). To get there, though, it must be thoughtfully tailored—because “perks” that don’t resonate with your population or intended audience will fall flat, no matter how great you think they are.
Get Better Through Benchmarking
To differentiate, you need to know what your competition is doing, right? Understanding what benefits are valuable to employees and prospective employees requires research as well. That leads us to benchmarking.
For instance, maybe you want to set your company apart by offering best-in-class benefits—but how do you know what that looks like? You’ll need a deep knowledge of the benefits your industry competitors are providing, as well as what options are available in the market before you can attempt to raise yours to that level.
Thinking about your specific objectives and workforce, get specific with your benchmarking: What level of health and life/disability benefits are competitors offering? What are their cost-sharing arrangements? What’s the median employer HSA contribution? When are employees eligible? Most benchmarking will take place with credible salary, benefits, or Total Rewards surveys that encompass your labor market. Done correctly, it allows you to slice and dice the data to look at the subset of the market most germane to you: In which industries are you competing for labor? Are you competing with like-sized companies, the big players, or both? What is your geographic focus?
Putting it All Together: Using Benchmarking Data to Execute Your Strategy and Achieve Your Objectives
Armed with this understanding of your labor market, you can start thinking about how you can position—and differentiate—your company within it. Do you want all of your benefits to be best in class, or perhaps keep PTO and retirement in line with competitors while health and life/disability are a cut above? Do you want to differentiate on quality, affordability (e.g., low employee premium share, high employer HSA contributions), or both? Do you want to benchmark at the 50th percentile and be right in the middle, or set yourself apart at the 75th percentile?
Once you have your data, organize it to tell a compelling story to your audience about what you’re doing, what your competition is doing, and the changes you are proposing to execute your differentiating Total Rewards Strategy. Use the data to drive actionable insights and recommendations, making it relevant to your organization rather than presenting a bunch of numbers without context. Choose clear and measurable objectives all parties agree on—and be explicit on the returns you are expecting (e.g., a faster fill rate, lower vacancy rate, higher retention rate, a more engaged or productive workforce), and the investment it will take to achieve those returns (additional spending on benefits, etc.).
Whether the audience is the CEO, the board, or even just yourself, benchmarking can help create compelling business cases for key decision-makers—and give your organization an edge in the ever-escalating war for talent in today’s marketplace.
Need Expert Help?
You probably don’t do your own dental work, or cut your own hair, because those things are best left to the professionals. It’s the same when it comes to compensation and benefits—it makes sense to bring in an expert who can work faster, more efficiently, and yield better results. Compensation and benefits consultants have the experience, perspective, and resources to guide you through developing a Total Rewards Strategy, including the implementation and analysis involved in benchmarking that empowers good business decisions.
Learn more about benchmarking and Total Rewards Strategy here.
References
- Harvard Business School. The Advantages of Data-Driven Decision-Making. Aug. 26, 2019. Retrieved from https://online.hbs.edu/blog/post/data-driven-decision-making
- Data, Analytics, and AI. Undated. Retrieved from https://www.pwc.com/us/en/services/consulting/analytics.html
About the Authors
Thomas Showalter, CCP, SHRM-SCP
Head of Client Engagement
Wilson Albers, an Alera Group Company
As Head of Client Engagement at Wilson Albers, he leads a team of professionals all focused on collaborating with their clients to achieve their workforce goals through smart, well-executed employment strategies. Thomas is a Certified Compensation Professional (CCP®) a Society of Human Resource Management Senior Certified Professional (SHRM-SCP®), and holds a bachelor’s degree in economics from the University of Oregon. In his over twenty-five years of leadership and HR experience he has provided employment strategies, engagement, compensation, and performance management services and has an invaluable understanding of client perspectives and expectations.
Connect with Thomas on LinkedIn
Heather Wagner, MSPM, SHRM-CP, PHR
Sr. HR Services Partner
Alera ConnectHR
A second-generation HR professional with more than 29 years of experience in a variety of local industries, Heather has extensive knowledge in employee relations, compliance, recruitment and retention, and HR information systems. Heather understands how important it is too balance HR processes and procedures with an organization’s business needs; helping small to medium-sized businesses build solid and compliant HR services in a timely, cost-effective, and efficient manner. In addition to her Bachelor of Science degree in business administration with a concentration in human resources from Towson State University, and a Master of Science in Project Management (MSPM) from the University of Alaska Anchorage, Heather has earned the Professional Human Resources (PHR®) certification and is a Society for Human Resource Management Certified Professional (SHRM-CP®).
Connect with Heather on LinkedIn
