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Five Total Rewards Schemes To Help You Outperform The Competition From embracing customization and leveraging technology through to the adoption of a more holistic approach, here's how HR leaders can use their insights to get ahead in total rewards.

By Ahmad Waarie

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Organizations with a well-planned total rewards strategy are gaining a significant advantage in terms of talent attraction, engagement, and retention. This was revealed by Willis Towers Watson's 2018 Modernizing Total Rewards (MTR) Survey, which identified global leaders in total rewards and then analyzed the actions that are bringing them this success.

From embracing customization and leveraging technology through to the adoption of a more holistic approach, here's how HR leaders can use their insights to get ahead in total rewards.

1. Champion a different mindset and approach to total rewards

The MTR Survey shows that a proactive approach to total rewards is crucial. Companies lagging behind in their implementation of a total rewards scheme are far more likely to experience retention problems with critical skill and high-potential employees. Leaders demonstrate a strategic, holistic mindset. They use analytics to understand demographics and workforce expectations, and they leverage technology to engage employees, resulting in a differentiated total rewards package that delivers consumer-grade experiences.

What action should you take and how can it help your organization? Adopting a holistic approach will offer HR leaders a significant competitive edge; leaders are more than five times as likely to clearly differentiate their total rewards offering from that of their competitors. By rethinking program design and delivery to include an understanding of what employees' value, HR leaders can achieve better results attracting and retaining candidates.

Related: How Rethinking Performance Management Can Help Drive Business Success

2. Tailor their total rewards strategy for different segments of their workforce

Leading companies are increasingly segmenting their workforce. According to the MTR survey, over 40% of organizations now define a total rewards philosophy for different segments. Incentives are the total rewards areas most commonly segmented, followed by compensation, then health and wellbeing, and finally financial and retirement benefits. The vast majority of segmentation takes place according to role, but around 40% of those companies that segment do so according to performance.

What action should you take and how can it help your organization? By taking a broader view of total rewards, you can more effectively segment your scheme to suit all sections of the workforce. Key components to consider include retirement/financial benefits, career opportunities, recognition programs, learning and development opportunities, flexible work programs, and health and wellbeing programs. Leading organizations typically take into account five of these programs as key components of their total rewards offering, while companies at the lower end of the scale consider only two.

3. Customize total rewards for different employees

Three out of five leaders differentiate between the key elements of their total rewards program and customize them to suit individual needs. This provides the valuable flexibility and personalization that employees seek. According to Willis Towers Watson's 2017 Global Benefits Attitudes Survey, there is a particular opportunity for companies in the Middle East to gain an advantage in this respect. When asked whether benefits packages were flexible enough to meet their needs, only 32% of employee respondents in the EMEA region reported that they were.

What action should you take and how can it help your organization? There is a huge opportunity to improve customization by including elements such as work/life balance, retirement benefits, plus health and wellbeing. This will allow HR leaders to improve their performance in attracting and retaining a workforce of diverse employees. According to the MTR survey, 43% of leading companies are fully prepared to engage a diverse workforce– nearly three times the number of lagging companies.

4. Measure the success of total rewards

Few organizations are currently measuring ROI on their talent and award programs. Even among the leading companies, only 22% are taking a comprehensive measurement approach, but that's still double the number for companies lagging in their total rewards programs. The ROI metric most commonly measured is total cost, but half of all companies in the MTR survey are not even measuring this. In the Middle East, only 40% of companies are measuring the overall costs of their total rewards programs.

What action should you take and how can it help your organization? Companies leading the way are more than twice as likely to financially outperform competitors that lag behind, but if your organization has not yet considered change, it's worth revisiting with some urgency. The more you measure, the more you can control ROI on your total rewards program, which in turn will make the program more effective. To achieve a robust measure of ROI, you can focus on five key metrics: full cost of all your total rewards programs, the cost of individual programs, impact on employee engagement, impact on employee retention, and impact on employee attraction.

5. Make effective use of digital technology

According to the MTR survey, only a fifth of Middle East companies are making good use of technology to deliver their total rewards programs. Interestingly, 40% admit to having the technology but making no use of it at all. This is clearly a widespread problem, as a staggering 59% of companies worldwide admitted to the same thing. This despite more than half of them having an intranet or HR portal and even some internal social platforms or mobile apps. The survey shows that leading companies are four times more likely (than those lagging behind) to have technology and use it effectively to deliver a consumer-grade experience.

What action should you take and how can it help your organization? Follow the example of companies leading the way in attraction, engagement and retention by using digital technology to segment employees and understand their preferences. Use your intranet or social platforms to communicate different messages to different audiences. Finally, utilize internal comms technology to gather feedback and understand employee preferences.

Reaping the total rewards

As the MTR survey demonstrates, total rewards programs have become a key weapon in the HR armory. If you can improve program delivery, differentiate your total rewards, tailor your offering, and accurately measure engagement and ROI, you will get ahead of your industry peers in attracting and retaining top talent.

Related: Why HR Is Your Company's Greatest Asset During Transformation

Ahmad Waarie

Managing Consultant and Head of Talent, CEEMEA

Ahmad is an expert in Strategic Human Resources development and implementation and has 30 years’ experience in this field. Prior to joining Willis Towers Watson, Ahmad was the Director of Strategic Human Resources at The Executive Office/Council of Dubai , where he championed the strategic transformation of the Dubai Government through the introduction of high-profile and complex projects and initiatives. Ahmad also served as the HR Advisor for the UAE Prime Minister’s Office and assisted in the development of high profile strategic projects.  Ahmad has worked in multinational organizations across four continents and has a vast experience in all the areas and challenges in the HR field. He has developed and implemented many high-level HR projects across public and private sector organisations.


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