Total Rewards strategies continue to evolve, driven by the diverse expectations of today’s workforce. These strategies encompass not just compensation and benefits but also recognition, career development, DE&I initiatives, and mental wellbeing, all designed to boost engagement and retention.
Explore key trends shaping Total Rewards programs and see how organizations can adapt to personalization, transparency, wellbeing, hybrid work, and continuous learning to foster employee engagement, trust, and retention.
Personalization: Aligning Rewards with Individual Preferences
Employees increasingly expect customized compensation and benefits packages that reflect their specific needs. Personalized rewards, such as flexible schedules, unique benefits packages, and career development programs, empower employees and demonstrate that their contributions are valued.
By aligning rewards with individual preferences, companies foster a sense of appreciation and loyalty. Clear communication of personalized benefits ensures that employees recognize the full value of their compensation.
Candidate Statements: Building Transparency in the Hiring Process
Transparency begins long before an employee joins an organization. Providing Total Rewards Candidate Statements during the hiring process is a powerful way to communicate the full scope of compensation being offered. These statements go beyond base salary, including benefits, bonuses, PTO, and other non-financial perks.
By offering candidates a complete picture of their potential rewards, companies can:
- ● Build Trust: Transparency about compensation fosters credibility and reduces uncertainty for job seekers.
- ● Highlight Value: Showing the total value of benefits demonstrates a company’s commitment to its employees’ wellbeing.
- ● Stand Out in the Job Market: In competitive hiring landscapes, Total Rewards Candidate Statements help organizations differentiate themselves from others offering similar roles.
A Glassdoor survey found that 60% of employees strongly consider perks and benefits when evaluating job offers, and 80% prefer additional benefits over a pay increase. Providing a clear, upfront breakdown of Total Rewards helps candidates make informed decisions, promoting a positive employer brand while attracting top talent.
Wellbeing: Addressing Mental Health and Belonging
The wellbeing of employees extends beyond physical health, encompassing mental health and a sense of belonging. According to EY’s 2023 survey, 41% of global workers say their workplace provides the greatest sense of belonging outside of home. Yet, 75% have felt excluded at work, and 56% hesitate to share aspects of their identity, fearing it may affect career advancement. This figure rises to 77% among LGBTQ+ workers.
Flexible work arrangements and check-ins have proven effective in fostering belonging. 45% of employees say that flexible work motivates them to promote DE&I within their teams.
Read More: Wellbeing - Addressing Mental Health and Belonging in the Workplace
Recognition: Retaining Gen Z and Millennials Through Appreciation
Younger generations, particularly Gen Z and Millennials, are more likely to switch jobs in search of better recognition. A SHRM study found that:
- ● 43% of Millennials and 78% of Gen Z workers plan to leave their jobs within two years.
- ● 79% of employees say more recognition would make them more loyal.
- ● 50% feel their strong performance goes unrecognized.
Incorporating recognition programs into Total Rewards helps businesses engage employees and reduce turnover by showing appreciation for their efforts.
Hybrid and Remote Work: Flexibility as a Retention Strategy
Remote and hybrid work arrangements are now essential for employee satisfaction. Gallup research found that:
- ● 6 in 10 remote-capable employees prefer hybrid work.
- ● 64% of fully remote employees are likely to leave if denied flexibility.
- ● Only 11% of on-site employees are likely to switch jobs if flexibility is restricted.
While hybrid work improves work-life balance (76%) and efficiency (64%), it also presents challenges, such as reduced collaboration and limited access to resources. Companies need to clearly communicate the benefits, resources, and support available for hybrid workers to ensure they feel connected and valued.
Read More: Thriving Remotely - Adapt Your Statement for Engaged and Rewarded Hybrid Teams
Transparency: Building Trust and Fairness Through Clear Communication
Pay transparency is critical for building trust and retaining talent. According to Mercer’s 2023-2024 study, employees who believe they are paid fairly are 85% more engaged and 62% more committed to their organization.
Equitable pay is also the most important factor in creating a sense of fairness at work, cited by 40% of employees globally. Clear communication around pay equity efforts helps employees feel valued and fairly compensated, fostering trust and belonging.
Continuous Learning: Skill Development and Career Growth
Employees are increasingly seeking learning opportunities to advance their careers. A SurveyMonkey poll found that:
- ● 59% of employees say training improves their job performance.
- ● 51% report that training boosts their self-confidence.
- ● 33% credit training programs for helping them earn a pay raise.
By investing in ongoing development, companies not only improve employee satisfaction but also boost retention and performance.
Read More: Continuous Learning - Skill Development and Career Growth
Inclusion and Equity: Driving DE&I Efforts Through Rewards Communication
DE&I initiatives play a vital role in attracting and retaining top talent. According to EY’s survey, 63% of workers prefer companies that prioritize DE&I, with Gen Z (73%) and Millennials (68%) leading this trend. However, 66% of employees report barriers to career progression, with lack of resources (24%) and unfair wages (23%) cited as the biggest challenges.
By communicating DE&I efforts clearly, companies can foster trust and ensure employees feel supported in their career journeys.
Competitive Advantage: How Total Rewards Drive Talent Retention
Comprehensive Total Rewards strategies provide companies with a competitive edge. According to Mercer, 68% of employees plan to stay with their current employer when they feel supported through pay, benefits, and career growth. Additionally, 80% of employees prefer benefits over pay raises.
Clear communication of these rewards builds trust, improves engagement, and strengthens the employer brand.
Conclusion: Empowering Total Rewards with Backstitch
As companies look to 2025, personalization, mental wellbeing, DE&I, transparency, and continuous learning are essential components of effective Total Rewards strategies. Employees today expect recognition, flexibility, and fair pay, and organizations must communicate these benefits clearly to foster engagement, trust, and loyalty.
At backstitch, we understand the importance of clear communication in engaging employees and supporting HR teams. Through our solutions, we help businesses bridge the communication gap—ensuring that employees understand the full value of their rewards, fostering engagement and retention in the process.
Book a demo to learn more about how backstitch can empower your Total Rewards strategy today.
