using a total rewards strategy to engage a multigenerational workforce … · 2017-12-05 · what...
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HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 2
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
From Traditionalists to GenZ, today’s organizations employ a broad range of generations. Each employee
age group has their own set of values and priorities. These differences can provide a rich blend of unique
perspectives to create a thriving workforce where Total Rewards becomes important for all.
In spite of having the most robust blend of generations in the workforce than ever before, employers are facing
staffing challenges, too. Skill shortages and low engagement levels are affecting virtually every industry. As a
result, organizations are seeking creative ways to attract in-demand talent, keep workers engaged, and retain
their top performers.
Enter, the Total Rewards Strategy. By recognizing the diversity within your workforce generations, you can create
a rewards strategy with components designed to appeal to each age group.
In this guide, you’ll discover tactics for creating a total rewards program aimed to engage your multigenerational
workforce. Throughout the coming pages, we’ll discuss:
the purpose of a total rewards strategy,
what it takes to attract and retain talent,
the most important factors driving employee engagement,
the main differences among generational groups,
the building blocks of total rewards,
the total rewards design process, and
effective communication strategies for each generation.
If you’re ready to find out what you can do to make your total rewards strategy more appealing to the various
generations of employees, let’s begin!
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 3
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
What’s the Purpose of a Total Rewards Strategy?
According to an HRsoft poll, only 32% of
employers have a formalized total rewards
strategy in place. If your organization is among
the other 68%, it may be a good idea to consider
developing one.
Developing a strategy for your total rewards
plan serves a number of purposes. It helps you
stay focused with your goals as you design your
plan and can prevent you from going off track
when you need to make decisions about what to
include.
Having a total rewards strategy in place can also achieve the following objectives:
Reinforces the mission and vision of your organization
Your total rewards strategy should also tie into your overall HR strategy and align with your organization’s
mission statement.
Defines which core elements will create an appropriate competitive advantage
What are some of the most sought-after elements you can use to give your company a competitive
advantage? Whether it’s flex time, PPO, or a specific benefit, taking the time to develop a strategy will
help you define these core components.
Provides clarity for your talent management group
Don’t forget about your recruiters. They, too, can use your total rewards plan to attract new talent.
Creates guidelines necessary for designing a rewards program consistent with your organization’s
mission and vision
Having guidelines will help HR and managers to maintain consistency and not steer off course.
Remember to review it annually so you can stay agile as your business needs change while also keeping
your program aligned with your company mission.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 4
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
What It Takes to Attract & Retain Talent
Lockton has performed extensive research to identify what it takes to attract and retain employees, along with
the key factors that would compel them to leave an organization. We can use these findings to craft a total
rewards program that may better appeal to employees.
Lockton found that the three most important elements an employee needs to stay with a company are:
challenging work,
encouragement to develop, and
positive interactions (with both managers and peer groups).
On the other hand, the three top drivers causing employees to leave are:
lack of recognition,
no motivation, and
lack of growth opportunities (especially for Millennials).
Now that we know what it takes to retain employees (as well as what would drive them away), let’s take a look at
some factors that can keep employees engaged in their work.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 5
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
The Top 5 Reasons Employees Are
Engaged
As you know, engaged employees are typically
also more likely to be retained employees, so
keeping your top talent engaged is one of the
best ways to encourage them to stay. Moreover,
employee engagement has a direct impact
on countless business outcomes, including
productivity. By identifying what keeps your teams
engaged, you can leverage these factors to make
your total rewards strategy more powerful.
The top five factors impacting employee engagement include:
Connectivity to Manager
The top driver of engagement for employees is the connection they have with their managers. Moving
forward, we’ll find out how managers can communicate with their teams of all generations to develop and
maintain strong connections.
Growth & Development Opportunities
For Millennial employees in particular, this is the single most important driver for engagement. It’s also
the leading factor they seek out in employment opportunities. While it’s important to appeal to Millennial
employees with development opportunities during the recruitment stage, it’s equally as critical to
continue offering outlets for ongoing growth as part of your total rewards strategy to support retention
and engagement initiatives.
Work Experience
Employees seek a positive work experience, which you may be able to support through initiatives like
paid volunteer hours and outlets for teams to interact with one another in less-formal, fun ways. Some
companies even host “bring your dog to work” days. We’ll learn about some additional tactics to improve
the work experience shortly.
Personal Time
Striking a healthy work/life balance is important to employees. This is especially true for those who are
juggling responsibilities like family life, continuing education, volunteer hours, and similar obligations.
Challenging Work
Having challenging work isn’t just necessary for employees to stay with a company, it’s also essential for
keeping them engaged.
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an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 6
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
As you can see, there’s some overlap among the list of engagement drivers and things employees need to stay
with a company. These elements – challenging work, development opportunities, and positive interactions with
managers – should be considered paramount when structuring a rewards program meant to engage and retain
your employees.
Interestingly enough, you can also see that compensation and benefits are not included on these lists. Of course,
that doesn’t mean they don’t matter to employees – it simply shows that there are other factors employees
consider most important in their working lives to stay “engaged”. These findings can help you put a total rewards
strategy in place which addresses more than compensation and benefits alone, focusing on the components that
matter most to your people.
As you’re building your total rewards strategy, you’ll need to think about what it takes for people to stay as well
as why they’d leave. There may be different reasons for your company depending on the nature of your business,
the distribution of generations within your workforce, and other differentiating factors, but the majority of
organizations are experiencing the trends discussed above.
Let’s move on and take a brief look at some of the key differences between the multiple generations in your
workforce.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 7
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Main Differences Among the Generations of EmployeesUnderstanding the mindsets each generation
brings to work, as well as the aspects of their work
life they consider to be most important, will help
you develop a total rewards program that can
appeal to everyone.
Here are the generations of employees you may have working for you:
Traditionalists
You may not have many Traditionalists still working for you, if any, as most of these employees have already
retired. They were born between 1922 and 1945 and view employment as a reward. Traditionalists are also known
to be very loyal to their employers.
Baby Boomers
Born between 1946 and 1964, these employees usually have an optimistic approach about work. In general, they
tend to be excited about the prospect of work and the opportunities it can provide.
Baby Boomers want to excel at what they do. They’re often willing to learn and want to focus on skill practice to
build a strong career. One of the benefits they consider most important is job security, and their primary wealth
need is retirement planning.
Generation X
The next generation is made up of individuals born from 1965 to 1980. Gen Xers are known to be highly motivated
and independent (which also means that they tend to dislike close supervision). They may ask “Is there an app for
that?” because while they are not as technologically adept as Gen Yers, they are still somewhat tech-savvy.
Unlike Baby Boomers, Generation X employees’ work priority is to have a fun and flexible career. Because this
generation tends to be sandwiched by caring for elderly parents and their children, an important priority is striking
a healthy work/life balance. Their primary financial concern is simply to build wealth.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 8
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Generation Y
Commonly referred to as “Millennials,” employees
born from 1981 to 2000 make up Generation
Y. They tend to have a “can-do” attitude and
seek out mentors to guide them in their career
development. They are technologically superior to
the other groups: whereas Gen Xers ask whether
there’s an app for that, Gen Y employees simply
assume that one exists. Education is of significant
importance to Millennials, and their main objective
is to accrue as much knowledge and experience
from their jobs as possible. When it comes to
work/life balance, their aim is to achieve a
meaningful relationship with the community.
Volunteerism is important to many members of
this generation.
Gen Z
This group was born between 1996 and 2010 and represent the next wave of employees that companies must
understand in order to harness their talents and attract their interest. They have never known a world without
smartphones and social media, so it’s even more ingrained for them. Unlike the Millennials, Gen Z is less
interested in sharing their lives for the public record. They were raised by the Gen X parents who lived through a
recession so their sense of money is much stronger than their Millenial counterpart.
Now that we’ve identified the key characteristics of the generations in your workforce, let’s see how we can fit
these findings into your total rewards plan by looking at its building blocks.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 9
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
The Building Blocks of Total Rewards
Your total rewards program may look a bit different than the next company’s, as each has their own set of
priorities, mission statement, and workforce. However, there are three main building blocks of total rewards that
all companies have: compensation, benefits, and workplace experience. Compensation can include base salary,
variable pay (annual incentives, profit sharing, etc.), long-term incentives, pay-for-performance, and so forth.
Benefits include healthcare (medical, prescription, dental, and/or vision), disability, retirement, paid time off, long-
term care, and wellness, to name a few.
Workplace experience, however, is the building block that affords you the most creativity. You may find that some
of the elements listed below could be relevant to your company.
Growth & development
Talent management
Succession planning
Communication
Connectivity to supervisor and leadership
Work/life benefits
Corporate leadership
Recognition
While the possibilities are virtually endless here, you must make sure that the elements you’re focusing on are
both sought after by your employees and aligned with your corporate mission and values. We’ll go over some tips
for fulfilling those two priorities in an upcoming section.
In the meantime, let’s look at two examples of how real companies chose to compile their total rewards strategy.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 10
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Sample Strategy #1
One company assessed how their employee needs aligned with business needs. (This is an essential step for
every company to follow, as it’s extremely valuable for securing executive buy-in.) They chose to do an employee
survey to identify what was most important to their teams. Called an “employee climate survey,” this assessment
asked employees to rank a list of benefits from most to least important.
Separately, the company held a total rewards strategy session with business leaders. At the time, they were in a
growth period and going through acquisitions.
By merging the priorities of employees and senior leadership, the company’s HR team was able to develop a
total rewards program encompassing:
Variable Pay
Fixed Pay
Performance Management
Health and Welfare
Savings/Retirement
Time Off
Learning & Development
Work-Life
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 11
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Sample Strategy #2
In another example, a second company chose to focus on five core elements. While these elements included
benefits and compensation, the three others all fell under the realm of work experience. Here’s how they
designed their total rewards package to engage their workforce:
Benefits: Medical, dental, vision, retirement, death and disability, long- and short-term disability
Compensation: Base pay and variable pay
Rewards & Recognition: Performance management, discount programs, onsite celebrations
Career Development: Training opportunities, tuition reimbursement, collaboration, encouragement of
expression
Work Life: Unlimited PTO, diverse work environment, support of community and environment, paternity/
maternity leave, employee assistance program, bring your dog to work opportunities
Your organization’s total rewards package will look a little different from the samples above, but these examples
may inspire you to “think outside the box” in terms of what you can offer to engage all of your generations.
Mentorship opportunities, for instance, have become increasingly popular ways to offer a richer work experience
for employees.
At the same time, gaining an understanding about where your company is headed from your executive
leadership team is also essential for developing a future-focused total rewards plan. Collecting insights about
potential mergers or acquisitions, for example, is necessary for developing strategies to keep new and existing
employees of all generations engaged.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 12
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
The Total Rewards Design Process
There are four main steps for designing your
total rewards program: understanding, assessing,
strategizing, and recommending. You’ll see below
that the brunt of the work takes place within
the first two steps; this is because you must first
identify your needs and current state before you
can determine where you need to go.
Understand
To understand where you are currently, you’ll need to consider business goals, program costs, and employee
expectations.
To help you gauge the state of your organization, below are a few things you may want to ask your leadership
team:
Are we in growth or stability mode?
Are there any market pressures we’re facing?
Are we focused on a specific market segment?
Is there a particular philosophy you’d like to see the organization take when developing a total rewards
strategy?
What is the organization’s value proposition, vision, and mission?
Do our existing reward programs support our both our long- and short-term goals?
Which rewards programs are most (and least) effective for supporting our mission and culture?
Which programs are most important to the organization?
Do you think employees are currently engaged, and if so, is it a result of the rewards we offer?
How do we attract and retain top talent?
Who is our peer group, and should we tailor our philosophy to match their current strategy?
Where should we anchor pay and benefits: 50th percentile, below, or above?
How does variable compensation play a role in total compensation, and what should the mix of pay be?
Do we have a pay for performance culture?
Are there any rewards that appear to be “missing” from the package?
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 13
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Assess
The assessment phase has a few different steps. For one, you’ll want to survey the market to compare
benchmarks against your own total rewards program. For another, you and your fellow HR colleagues can review
the current plan design to identify business implications.
One option for identifying the strengths and weaknesses of your existing reward plan is to perform a SWOT
analysis. You may already use SWOT analyses in your organization. (If not, here’s a brief refresher: SWOT is an
acronym for Strengths, Weaknesses, Opportunities, and Threats.)
To carry out the analysis, ask yourself the following questions:
Strengths
Which reward programs currently work well for us?
Which should we keep and/or emulate?
Weaknesses
Which plans are not working well?
What, and how, much needs to change?
What are the market conditions, and are we competitive?
Opportunities
How can we meet the demands of key stakeholders?
Could we be more competitive?
What are employees’ perceptions of total rewards?
Threats
Which conditions are threatening the success of our business?
How are our existing plans failing to respond to external conditions?
How are our existing plans failing to respond to internal conditions?
Finally, you may wish to perform an employee climate survey to gather responses to total rewards questions.
Please keep in mind that you can ask these questions initially; or, you may also choose to skip directly to
performing a total rewards value analysis to give you an idea as to how your company compares to your specific
peer group.
After you’ve collected all of the data you need from your current plan, the market, and input from both leadership
and employees, you can perform a gap analysis to identify where you are now versus where you need to be
before moving onto the strategy portion of the design process.
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an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 14
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Strategize
To strategize, begin by recalibrating HR’s approach to total rewards based on the findings you collected in the
previous steps. You can then design your total rewards program in a way that supports your strategy, and assess
its financial implications to be presented to your leadership team.
Recommend
Finally, you can present the total rewards strategy developed by HR to your executive team. Make sure that you
clearly identify the link between the total rewards program and your organization’s strategy. Of course, you’ll
also be asked about the financial impacts of the program, so have answers prepared for potential questions
executives may have.
Once the above processes have been completed, you’ll need to communicate your total rewards program to
employees, bearing in mind the needs of each generation of your workforce. Let’s take a look at the preferred
communication methods of each generation next.
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an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 15
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Total Rewards Communication Strategies for a
Multigenerational Workforce
Each group in your multigenerational workforce has its own communication preferences. Although it may be
challenging at first to meet the needs of everyone, bear in mind that diversity is a good thing. Not everyone fits
one mold, and the better you’re able to communicate with each generation, the better you’ll be able to motivate
your teams.
In fact, multigenerational communications can actually drive collaboration. Consider how Baby Boomers could
learn from Millennials, and vice versa.
Most importantly, you’ll need to train your managers communicating in a multigenerational workforce, because
as we mentioned earlier, the number-one driver of engagement is how well employees connect with their
managers.
Below, we explore each generation’s preferred communication channels.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 16
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Communication Channels
for Each Generation
While traditionalists may have preferred personal
notes and individual interactions, over the years,
the increasingly fast-paced nature of the changing
business landscape led to a need for more rapid
communications. For instance, on the other end of
the spectrum you have Millennials, who prefer to
communicate via texts and instant messages.
Fortunately, you don’t have to choose just one
communication channel. Here are some ways you
can appeal to each generation:
Traditionalists & Baby Boomers typically prefer face-to-face, personal interactions. They also like phone calls
and informal conversations. Encourage managers to hold casual conversations over lunch or coffee, and have
them inquire about mutual interests. Make exchanges participative, and link the message to team or individual
results.
Gen Xers prefer more direct interactions than Baby Boomers. Train managers on getting “straight to the point” and
limiting corporate jargon when communicating with Gen Xers. Email is preferred among this generations.
Millennials expect instant communications, so any form of digital or instant messaging are ideal for
communicating with this age group. Give managers tips on how to avoid condescending tones, as Generation Y
can find this off-putting. Managers can also focus specifically on communicating with Millennials about personal
and professional development opportunities.
Some communication channels you may wish to experiment with could include total rewards statements,
placards, manager meetings, town hall meetings, FAQs or summary statements on your intranet, Webex
presentations, or even a salary management app.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.Page 17
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
Summary
As we’ve seen, total rewards plans cannot be fashioned using a “one-size-fits all” approach. That said, you can
take a strategic approach to designing a more powerful total rewards program by assessing the wants and
needs of your multigenerational workforce, as well as those of your senior leadership. For an even more powerful
program, you can assess the market to see where your total rewards program stands in comparison to your
competitors’. From there, you can develop a plan that addresses each of these components, and then use the
appropriate communication tactics to appeal to the widest possible audience.
To leave you with some actionable takeaways, here’s a brief review of the main ideas from this guide:
The purpose of a total rewards strategy is to reinforce your company mission and vision, while also
helping you achieve a competitive advantage.
An effective total rewards program can support your retention strategies by leveraging the key drivers of
employee engagement, including connectivity to manager, growth and development opportunities, and
work experience.
Each generation has their own set of expectations for their work life. Identifying the priorities each group
considers most important will help you design a total rewards program built to suit everyone’s respective
needs.
The building blocks of total rewards include benefits, compensation, and workplace experience. The last
category is the one which you might have the greatest ability to customize, and therefore leverage, to
keep each generation engaged at work.
The total rewards design process includes four phases: understanding, assessing, strategizing, and
recommending. In order to design an improved program to appeal to your multiple generations, you must
first have a complete understanding of your current state.
You can survey both your leadership team and your employees to see where you stand, as well as where
you need to go.
Each generation has its own preferred communication channel, so it’s important to train managers on
some different approaches for communicating total rewards.
Making these changes to your total rewards program and its corresponding communication strategy is a powerful
way of showing your employees that you value each generation equally. It also demonstrates your willingness
as an employer to create a positive work environment for everyone. By adapting your total rewards program
to the needs of each generation, you can support your overall workforce strategy of creating a more engaged,
committed, and motivated workforce.
HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with
an intuitive, easy-to-use interface that simplifi es and automates the entire compensation process helping companies save time and their best employees.Page 18
Using a Total Rewards Strategy to Engage a Multigenerational Workforce
About the Contributors
Mary Mosqueda | Compensation Practice Leader, Lockton Companies
Mary Mosqueda has more than two decades of experience in compensation,
human resources, and work/life programs. She is an in-demand national speaker
on total rewards and compensation and has been a key contributor in the strategic
development of public and private sector executive compensation and total
rewards programs that attract and retain top talent.
Mary assists clients with strategy, design, funding, administration, and
communication of total rewards programs and incentive compensation plans.
Resources
HRsoft is the industry leader for compensation planning and total
rewards software. Our cloud based SaaS solutions combine best
of breed features with an intuitive, easy-to-use interface that
simplifi es and automates the entire compensation process helping
companies save time and their best employees.
Phone: 866.953.8800 | Email: [email protected] | Web: hrsoft.com