As the war for talent in today’s tightening labor market intensifies, a majority of U.S. employers are taking steps to modernize their Total Rewards programs, according to a new survey by leading global advisory, broking and solutions company Willis Towers Watson.
“We know from our research that Total Rewards programs are crucial to an employer’s ability to compete for talented employees in today’s digitally disrupted workplace,” said Carole Hathaway, global Rewards leader, Willis Towers Watson. “Many employers’ Total Rewards initiatives have not kept pace with the new world of work environment; therefore, employers are now recognizing the need to modernize these programs and make enhancements in order to deliver the most value to their employees.”
Total Rewards programs typically include tools employers use to attract, retain and engage employees including compensation, health and wellbeing programs, retirement and financial benefits, flexible work programs, recognition programs, learning and development opportunities, and career opportunities. Interestingly, the survey found less than half of employers (49%) understand which Total Rewards offerings their current employees value. Even fewer respondents (47%) know which components potential candidates value.
Nearly two-thirds of employers (66%) have made at least one change to their Total Rewards program; of those who haven’t, two out of three are considering doing so this year, with the other third considering changes over the next three years. These changes include:
- Greater flexibility. More than six in 10 employers (61%) are considering providing more flexibility (e.g., with regard to benefits, working arrangements, career options) this year or within three years. Seventeen percent have already done so.
- Health and wellbeing benefits. Over the past three years, four out of 10 employers have made progress in promoting employee wellbeing — important, considering that over 80% expect employee wellbeing to increase in importance over the next three years. As a result, most employers are considering changes to help promote employee wellbeing over the next three years.
- Personalized communication. Two-thirds of employers (67%) expect to improve their personalized communication this year or within three years. Thirteen percent have already done so.
- Technology. Sixty percent of employers expect to improve technology to administer benefits this year or within three years. More than a quarter (27%) have already done so. Half of employers (50%) expect to improve technology for employees to use either this year or within three years. More than a third (37%) have already done so.
- Transparency. Nearly two-third (64%) are considering taking steps to improve pay transparency either this year or within three years. Almost two in 10 (19%) have already done so.
The move to modernize Total Rewards programs comes at a time when employers continue to have difficulty attracting and retaining employees. According to the survey, a majority of respondents (54%) are having problems hiring employees with critical skills, while 49% report problems attracting high-potential employees. Employers also say they are having difficulty retaining these employees, although not quite as severe.
The survey also found there is room for improvement for many components of an employer’s Total Rewards program. Only half of respondents (51%) believe they provide their employees with a good work/life balance, while 53% say they design their Total Rewards program to help employees achieve wellbeing. Similarly, 53% say they provide meaningful choice within their benefit program, and 55% believe their programs provide a consumer-grade experience.
“Given the ongoing changes taking place in today’s work environment, employers are under mounting pressure to rethink their approach to Total Rewards and move beyond the status quo. We recommend employers carefully evaluate their overall strategy, gain a better understanding of what employees and prospects value, and ensure they have the right technology and tools to deliver a consumer-grade experience to their employees,” said Adrienne Altman, North America Rewards leader, Willis Towers Watson.
About the survey
The 2018 Modernizing Total Rewards Survey was conducted in July 2018. A total of 1,670 employers worldwide, including 275 large and midsize U.S. employers, participated.
About Willis Towers Watson
Willis Towers Watson is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.