Evolving Compensation Practices to Meet Changing Employee Needs

Hiring managers have had to transform many of their standard activities and procedures to accommodate today’s primarily virtual environment. From adapting interview processes to be effective and efficient over Zoom calls to confidently making a final offer to someone they’ve never met, most have risen to the challenge and expanded their comfort zones. At the same time, the desired skills for certain positions have shifted and, in many cases, what individuals are looking for in a role and a company has changed as well.

In order to attract and retain top employees in the evolving environment, hiring managers and human resources professionals should also be taking a fresh look at how they approach compensation. According to the Bureau of Labor Statistics, insurance industry wages rose in 2020, despite the pandemic. However, while monetary compensation will always be important, a holistic total rewards programs that best meets the needs of current and potential staff will set insurers apart as an employer of choice.

Start with the Basics

Although monetary compensation won’t usually stand on its own, it is important to ensure what you’re offering is fair and at market value. Competitive benefits, salaries and bonus structures set the foundation for a strong overall compensation package. However, once monetary compensation and benefits are established, consider the broader scope of total rewards, which may include professional development, resources for mental and physical wellness, recognition programs and flexible hours. Money will be important in getting individuals in the door; however, additional rewards and an engaging company culture will make your organization stand out and be key elements in retention.

Focus on Unique Needs

There is a broad range of what people value in an employer, and these elements can drastically shift depending on the individual. Think of each element of your total rewards program as having its own spectrum. Perhaps on one end of the salary spectrum, there is an individual who is willing to put in 70 hours a week in return for a high salary. On the other end, there’s someone who values less demanding work and is willing to sacrifice money in order to achieve this. The same may go for schedule and location flexibility. One individual may enjoy going into an office and working traditional hours, while another may value being able to complete work at home in the evenings and have mornings free. Most people will fall somewhere in the middle. These spectrums apply to a number of different areas, and they all work together to create a package that is meaningful and relevant to an individual’s unique needs. The key is to be able to define the parameters of each spectrum internally and then adjust the levers as needed.

Understand Motivators

Similar to the spectrums noted above, the allure of what you’re offering employees is completely dependent on what they value. Refrain from making assumptions based on your own preferences, the preferences of others on your team or even common generational preferences. Be direct in asking individuals what energizes and motivates them. Invite conversations around how you can enhance their experience and then find a way to deliver on what they share.

For instance, if someone is motivated by new projects and responsibilities, simply giving them more money won’t ultimately fulfill their root need. At the same time, things like childcare assistance and commuter benefits may be extremely valuable for parents who plan to return to the physical office. However, those same benefits will have no value to individuals without young children who will work remotely long-term. These personal motivators may also change over time. Ask managers to formally meet with staff on a regular basis and stay attuned to their needs and preferences.

Build Connections

A sense of camaraderie is often a universal motivator, although the best way to cultivate these connections may vary. It takes strategic energy to make sure every employee feels like a part of the team and company, even more so when everyone is working from separate offices. Provide ways for staff to stay involved and informed. Especially in times of change, transparent and frequent conversations about how things are going within the organization can help ease uncertainty. Pull people in every day and make conscious efforts to connect, even about non-work-related topics. Ask for opinions and suggestions and make sure individuals know they are a valued part of the organization, no matter their level or role.

Communicate Less Tangible Rewards

Especially in today’s unique work environment, employees are juggling more than perhaps ever before. Support in terms of flexible hours, access to mental health resources and updated technology carries increased weight. Development opportunities, specific performance review checkpoints, virtual team-building activities and mentorship programs are often among additional, less tangible benefits. Make these tools and opportunities known and communicate them as offerings within your total rewards package. Consider also reevaluating your employee recognition programs to ensure they’re impactful in the virtual environment. Understand the types of recognition that resonate best with each employee. Even small tokens of appreciation such as public acknowledgement during meetings, handwritten thank you notes, and gift cards can go a long way.

Continually Innovate

Creating an effective total rewards package is a marathon, not a sprint. Each year, you may tweak your benefits a bit. If you’re aiming to evolve areas more directly linked to company culture, know that culture shifts can be slow moving, and keep taking steps in the right direction.

Openly ask for feedback from employees and act on what they share. Be open and creative. Even organizations that were progressive prior to the pandemic have been redefining how they can best meet the current needs of their employees. We’re experiencing a fast-moving and non-traditional working world and total rewards packages should be non-traditional and fluid.

While base salaries and bonuses may be a large part of getting top employees in the door, it’s the less tangible rewards that will keep them with the organization. Focus on how you can best meet the shifting needs of your employees and continually ask for feedback. Remember, if employees or prospects don’t value something, they won’t see it as a reward. By taking a strategic and innovative approach, you’ll be able to motivate and energize employees, while growing them within the organization and building long-term working relationships.