Employee turnover is a major expense for many companies. As an employer, you spend valuable time and resources on attracting, interviewing, and onboarding new talent. While offering competitive wages is still vital to employee retention, modern workers often demand more in exchange for their loyalty.
Employees may find companies that offer them more, regardless of how good their paycheck is. However, if you build a total rewards package that takes care of other aspects of their lives, makes them feel appreciated, and gives them the long-term goal of growing with your organization, there's a good chance they'll stick with you through thick and thin. In this article, we'll explore how to retain workers by offering them benefits packages they value.
What is a total rewards package?
A total rewards package represents all the benefits an employee receives from their hiring organization. Benefits packages improve the overall workplace culture and employee loyalty by demonstrating that you recognize and appreciate their contribution. While rewards may vary based on company and employer characteristics, some of the most common benefits packages include the following:
- Financial rewards: These are special bonuses employees receive in addition to their monthly wages as a reward for great performance or years of loyalty. Financial rewards can take many forms, such as a one-time bonus check, a performance-based salary increase, company stock options, or a certain percentage of the company's profits.
- Professional development opportunities: Having a skilled workforce benefits you and your employees. You can show your staff that you want them to grow within your organization by offering training seminars, invitations to industry-specific conferences, and certification programs.
- A better work-life balance: Employee burnout is a serious issue that often occurs because workers don't have the time and energy to take care of their personal lives. You can foster long-term growth and show you value your employees by offering extra days off now and then, even if it affects short-term productivity.
- Extra benefits: Employees want reassurance regarding their long-term well-being. You can help them achieve peace of mind by contributing to their retirement plan and providing healthcare insurance.
- Recognizing their contribution: There are many symbolic elements you can include in your rewards packages to make your staff feel appreciated. These include awards for various milestones, such as a specific time working with the company, shoutouts on social media, and direct praise during company meetings.
- Cool benefits: You can also be the cool boss and offer non-traditional benefits to loyal, high-performing employees. These include tickets for various entertainment and sporting events, vacation travel packages, gym memberships, or restaurant vouchers.
"While offering competitive wages is still vital to employee retention, modern workers often demand more in exchange for their loyalty."
How to create an effective total rewards package
Several factors can help you determine the most effective rewards packages for your organization's workers.
Determine what you want to achieve
Simply stating that you want to retain employees or help them be more productive is a vague target. Try to outline specific goals and start building your rewards packages with them in mind. For example, you may want your entry and mid-level employees to stay and grow within your organization. You can then focus on building benefits packages that reward loyalty and foster long-term growth.
Make a cost-benefit analysis
Rewarding your employees is generally a good idea, but going overboard will drain your company's resources. Analyze how much the rewards packages will cost your organization in the short term and over multiple years. Compare what you offer with the estimated cost and try to find a win-win situation that benefits both your organization and its employees.
Find out what your staff wants
Not all employees respond to the same types of incentives. Some value time off, while others are highly ambitious and want to see a clear path forward within your company. Tailor your rewards packages based on what motivates individual workers or departments. You can find out by asking your employees directly and working with them to create meaningful bonuses.
Consider what others in your field are offering their employees
Since your goal is to retain and attract quality employees, knowing what your competition is offering may determine the success of your rewards program. Find out what your closest competitors' rewards packages look like, and find creative ways to differentiate yourself.
Create clear performance metrics and communicate them to your staff
You should use benefits packages objectively and transparently. Establish clear milestones your employees must reach to receive their rewards packages and ensure they know what to do. These factors can vary based on specific positions and departments, so you may need to create different metrics for each role.
Monitor your rewards packages' effectiveness
After creating and implementing your rewards packages, monitoring them and assessing if they've helped your company keep its top employees and attract quality new ones is essential. Discuss their effectiveness with your staff and ask for feedback on how you can improve them. It's important to keep up with the times as employee preferences change.
Benefits of effective employee rewards packages
Creating effective rewards packages can be challenging, but the result will be worth it. Some specific benefits of doing so include the following:
- Keeping your top talent: Arguably, the number one benefit of incentivizing your staff with rewards packages is that they'll be more likely to stay with you over the long term. Showing your appreciation beyond providing competitive salaries will make them more likely to resist any offers from competitors.
- Attracting high-quality job candidates: When a company is a great place to work because it allows its staff to grow professionally and personally, word usually gets around. Building this reputation can help draw other talented and hard-working people to want to work for you.
- Boosting productivity: Having employees who simply show up for work and do the bare minimum is bad for your organization. Motivating them with the right rewards packages will help them reach their potential, leading to better output and higher profits.
- Creating a strong company culture: A strong sense of community can result from having a company culture your employees can identify with. They'll appreciate and support each other, enhancing their collaborative efforts.
- Promoting employee initiatives: When employees feel valued, they're more likely to be creative and pitch in with useful ideas on how to move the company forward. It can help set you apart from competitors and prevent your company from falling behind.
- Giving your employees a sense of purpose: A non-quantifiable benefit of rewarding your staff for their hard work is that it helps give meaning to their work. Having a sense of purpose and seeing their job as part of a greater picture can do wonders for their well-being and productivity.
Managing human resources is far from being an exact science. Each company's workforce is unique, and only you and your staff will know which rewards are most likely to work best for your organization. You can be sure that your organization's bottom line will benefit from having a reputation as a company that values its employees.
More tips on effective staff management:
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Learn how to use targeted hiring to find quality candidates for open positions within your organization.
Do you want a more skilled workforce? Find out what skills-based hiring is and how to implement it for your organization.
