Ep. 19: Your Total Rewards Differentiator - bettHR

Welcome to episode 19 of the Rethink HR podcast, brought to you by bettHR.

In today’s episode, it’s all about your total rewards. Why it’s so important to focus on your differentiator when to talk about your total rewards package, and when and how to over-index on the right benefit or perk.

First, get clear on where your total rewards package fits within the marketplace across each item—compensation, benefits, perks, and so on. Are you above market, below market, at the market, or some variance for each item?

Next, understand what your company has already decided to over-index or invest in. It can be anything including having several great medical plan options; matching at a high-rate for your 401k; offering an exceptional parental leave policy or telecommuting policy; and so on. Understand where your company has decided to be above market for a specific benefit (or set of benefits), so you can get closer to determining your market differentiator.

From there, communicate what you over-index on and all of the facets about your total rewards program. Share things like what is saving your employees money, providing them with additional opportunities or perks, and so on.

Pro-tip: Open Enrollment/Annual Enrollment is the perfect time to revisit your total rewards key messaging. Take the opportunity to remind your employees how you’ve invested in them, their options, their health, and so on—to create more engagement.

Listen in, to learn more!

In This Episode

  • How to inventory your total rewards package.
  • Understand your total rewards differentiator and how to leverage it throughout your employee’s lifecycle.
  • Reminder: Total rewards is a significant spend for your company, be sure your employees know what you are investing in for them.

Resources

Melissa Anzman (00:00): For your employees so that they can get engaged around your offerings and also understand what you are investing in for them and their pocket books and their longterm success at your company. I'm Melissa Anzman, HR practitioner turned CEO of a thriving employee experience company, but it wasn't all that long ago that I worked as an HR business partner responsible for increasing employee engagement at companies nationwide. And I struggled to move the needle even after trying everything under the sun, fast forward, past many fail tactics and lessons learned. And you'll see how I've been able to crack the code and replicated at companies of all sizes for creating true engagement and doing HR work that matters work that changes the lives of leaders, HR professionals, and employees. By focusing on the employee experience, I created the rethink HR podcast to give you actionable step by step strategies to help you make an impact.

Melissa Anzman (01:01): If you're an HR leader or one on the rise, who's looking to stop spinning your wheels, doing the same tired activities that aren't driving results, or you want to have a career. You love your in the right place let's get started. So even though you may be knee deep in a million different things, maybe even it's annual enrollment or open enrollment, whichever one you choose to call it. I want you to remember a few things or components I should say that make up why we should invest so much time and focus on how we communicate annual enrollment. And that's all about your total rewards program. Now, total rewards it's defined as a comprehensive list of compensation, benefits, perks, offerings, and programs that you provide to your employees. Now, this term started back when employee engagement was, um, in question or starting up, I should say, and total rewards has often been a way or thing that helped you attract or, or engage or, um, really keep your talent.

Melissa Anzman (02:15): And the thing is, is total rewards is super comprehensive. It's not something that a lot of us talk about, but it is, it is definitely a differentiator for your company. And I think even more so now as the workforce changes due to some external factors like coronavirus and the economy, as well as cultural factors of more telecommuting, or I should say less hierarchical companies and organizational structures and so on. And so the company that really brought total rewards onto the scene is Google. So when Google was created as a startup, it wanted to be known as that employer of choice, a really hip cool place. They were doing fun, innovative things, and they wanted to attract the top talent in the Bay area and to do that, they really put an emphasis on there, total rewards. And so a lot of them. So now when we think about comparing benefits, we really look to places like Google as our, that shining example of what they do for their total rewards.

Melissa Anzman (03:32): Now, the thing is, is Google. Isn't achievable for most companies and probably doesn't want to be for a lot of the companies out there. One of the things that the founders always talked about when they put such an emphasis and invested so much money in total rewards was they did it so that their employees could stay at work and work longer. So if we brought everything in house, they said, there's never a reason for them to leave. They can get it all done here and they can keep working now, perhaps not the best motivation behind that kind of investment, but Googlers don't seem to mind. So we'll let them slide with that one for your company. However, what total rewards is, what it encompasses has become a really big part of what being an employee is. And for HR, how we really can attract, retain and engaged talent.

Melissa Anzman (04:26): And truly, if we look at the numbers again, something that we don't talk about nearly as much, your total rewards investment is usually your company's biggest investment, not just HRS biggest spend, which it is, but usually it really can be your company's biggest bottom number. Cause remember we're talking about comp and benefits and all the perks. So that is a huge investment that our company makes. And with this level of investment, there comes a lot of responsibilities. And so many companies are not using their total rewards spend correctly or effectively. And most companies, I would say 99 out of a hundred companies, anecdotally does not talk about their total rewards appropriately, especially in relation to the overall spend. So we don't all want to be like Google, but what can you do for your company to make your total rewards program, the benefits, offerings, perks, and so on, become a part of your standout offer as to why people should want to come work for you and then why they should stay there.

Melissa Anzman (05:42): So the first question is what is your company's total rewards strategy, and to find this out or to put one together, I want you to consider what your pay practices are. Are you actually competitive in the marketplace? Where do you stack up the pay range or scale reports? Are you known in the marketplace for being a company that pays well or not? Now, we all wish that every company was known for being a great pain company, but that's not the case. So we have to be realistic about it. And it's not a knock. There aren't any right or wrong answers here, but we need to gather the right information. So we know which levers that we can pull as part of our total rewards differentiation conversation. So in addition to your pay practices, I want you to also look at what your company provides for benefits, usually medical, dental, vision, supplemental financial wellness, and so on.

Melissa Anzman (06:41): How robust are your offerings and how expansive are they? So do you have just one option for those things? Do you have several? I'm not saying you need several, but we're looking at what we can leverage as part of a bigger total rewards conversation and differentiation in the marketplace here. And so how robust are they? How expansive, how much, um, can an employee gain, like what's the perks for them, for your traditional benefits in the medical dental vision? And so on the next question I really want you to consider is what's your differentiator. So what is the benefit or benefits that your company has over-indexed on and why, and how do you use that to entice candidates and employees as a real win? So I want to share a few examples of this. Now your company absolutely decided to go a little bit more in than market in one total reward.

Melissa Anzman (07:42): And you're going to have to do some work to figure out what it is, your company, maybe like a minimal investor in total rewards, and maybe only have a one option. And it's an HSA only, or a, just a standard affordable care act plan. And that's all you do for medical, but you decided to do a ton in commuter benefits or something. So I want you to find that one area in which your company has actually over index and there definitely is an area. You just have to do the work to figure that out. And so here are some examples to get you thinking about what yours is. So at. And T provides a very strong medical program with very, very low employee premiums. They were still at $0 million contributions from their employees until just a few years ago. And we're talking like less than three years ago now for an outstanding medical plan, their monthly premiums still today in 2020 can be less than a hundred dollars for individual coverage.

Melissa Anzman (08:49): So it's a standout, especially within their industry. Think about that. They really have decided that their employees with medical coverage are not going to pay a lot of money to have outstanding plans. Now they can do this because they are a super large company and play in a lot of different markets and have some strong negotiating power around that. But I don't want to take away their credit that they have made this a differentiator for them in the market. So if you're looking for a job and you're comparing your option between a T and T and Verizon, you're going to choose at and T of medical benefit costs is important to you. It's that big of a differentiator. Another example is American express has a very generous paternal leave policy that they implemented well before the market caught up with them. So in 2017, they rolled out a 20 week paid leave program. In addition, they focus in on this area by also providing reimbursement up to $35,000 for adoption surrogacy, fertility treatments, and more their differentiator in the market. Their total rewards stellar moment is how they support their new parents. And I want to be clear on this. This was a paid leave program for both birthing moms and fathers and same sex couples and all.

Speaker 2 (10:22): So if you had a child

Melissa Anzman (10:23): Welcome to child, you got 20 weeks paid leave. You still get him today. And you have all the other things that make up for it on top of it. And they add an additional 35,000 for things like adoption, surrogacy, fertility treatments, and more that is standout. Most companies aren't doing that. That is not typical in the marketplace, but that is what American express has decided to over index on. Now, these are just two examples. There's so many more out there. Does your 401k give a huge match? Do you vest in your 401k early, um, looking at your medical plan options, are your premiums low, like at and T or do you have five different plan options depending on needs? Um, like some of the other big companies out there. So figure out what it is. What does your company decide to invest in as your differentiator?

Melissa Anzman (11:19): And I want you to not only think about these benefits, the traditional benefits that I mentioned, but also consider things like salary bonuses, pay time off remote work policies, sabbaticals, and more. We're talking everything under the sun that can be construed as a total reward benefit or perk. How do you, over-index on it? Where do your, where does your company shape up and where do they align themselves and how they invest? So I want to tie this back to the employee experience and knowing that that money in their pocket is always going to be the most important factor for total rewards when it comes to your employees, right? That doesn't mean that they only care about making more money from compensation perspective, but they also want to know how much they can save through your benefits and perks. And as we talk about your total rewards, differentiators, those are the things we want to leverage.

Melissa Anzman (12:19): And this is especially true during annual enrollment, because if you have great medical plan offerings, you need to tell employees about that. If your medical plan options are going to save them money, if your HSA plan is going to save them money, if you have an HRA that you contribute money to all of those things, how it hits your employees in their pocket book is going to be critical differentiation. So outside of the base pay total rewards is really a huge part of your employee experience because they want to earn money, which compensation is part of, but also they want to save money and have new opportunities through the benefits and perks that you provide. So as you think about your candidates or your employees who may be in a little bit of a depressive state, or not as engaged, or kind of scared with just all the external factors right now, what makes them stay.

Melissa Anzman (13:18): And those are the things you want to differentiate and share with them throughout the process. And as we, our economy turns around and as we start recruiting for more people, these are really the things that are the differentiation points. So many candidates that I interview with want to know, of course, like, what are the medical plan options, or what are the premium costs? And I've had different friends and family members care deeply about different things like what the pension plan is or what the bonus potential or deferred comp or fertility benefits and more so everybody has a different pain point and everybody has a differentiator that matters to them more. So our job in HR is to communicate our differentiators within our total rewards program so that we can help them self-select in or out. But also, so we can keep those employees who care deeply about what we care deeply about engaged and at our company and friends, we don't want to just over index on things or invest in things or add new things to our total rewards mix, because we think it's great.

Melissa Anzman (14:31): I've seen this happen all the time. I've just a director or a VP of benefits or a manager benefits come in and say, we need another plan. Let's add it. Or we should be matching this amount on our 401k because this competitor does. And as we do that, we do it in a silo, like many things in HR. And by doing that, we're not actually leveraging the employee experience framework or factors appropriately. We're not being true to what our employees actually need care about and want. And that's the important part of our total rewards package is that we're providing our employees with something that matches their needs. And so you want to ask them, you don't want to frame it in a way we're taking away benefits, or we need a slim down, especially right now, but you do want to provide some options in a survey, in conversations, in focus groups of what do you value most.

Melissa Anzman (15:30): And you can ask in a compare and contrast situation, or Hey, which total rewards of ours do you leverage the most? Which ones do you use? And usually it's going to say, well, medical, and then you tell me more about that. Like, what do you think about our medical plan? How are you using it? Do you find it easy to navigate? Does it fit your needs? All of those things can really help you understand what your employees like or load and what you should be over indexing in and actually make your differentiator because yes, right now in the marketplace, a differentiator may not feel as important as it was six months ago. However, I can guarantee you once the market turns, this is going to be a very important thing. So start the conversations now. And as we go into annual enrollment, if you haven't done so already be sure that you're talking about your differentiators, be sure that you're creating those positive experiences within the employee experience framework for your employees, so that they can get engaged around your offerings and also understand what you are investing in for them and their pocket books and their longterm success at your company.

Melissa Anzman (16:52): So while you don't need to spend a ton of money and over-indexing on everything like Google does, you do need to be sure that you understand what your total rewards differentiator is. And then talk about it all of the time, because this is truly what makes you a standout company as standout employer, a standout option for those in the marketplace. And also those who have already joined your ranks. This podcast is brought to you by better microsites with your HR budgets being cut and you being on the hunt for ways to do more with less. Why not consider a total rewards or benefits microsite that not only increases your employee experience, but also delivers increased value at half the cost better. Microsites are a hundred percent designed based on what your employees need to know, your branding and your inflammation, creating a diverse solution. That's inclusive of all improving the speed in which your employees can find important benefit information while seamlessly connecting with your enrollment provider. Learn more about better microsites at better.com/microsites. That's bettHR.com/microsites. Thank you so much for tuning in for this episode of the Rethink HR podcast. For more information, including show notes, resources, and more, please go to RethinkHRPodcast.com/19.