Gallagher

Vince Guerra

Managing a successful Total Rewards program looks different for every company. Many companies seek to offer the best reward programs in their industry or region to attract and retain quality talent. Others offer the minimum necessary to satisfy compliance requirements and maintain adequate staffing levels. However, most employers are trying to find the balance between cost and quality. Regardless of strategy your company employs, there are several surefire ways to diminish the value of your Total Rewards program for your workforce.

Below are the five of the most common mistakes employers make when creating and implementing their Total Rewards strategy. Avoid these at all costs.

1. Put claims data on a shelf: Data should always drive strategy. The sources of data available to employers have never been so diverse and extensive. Health plan claims, customized benchmarking reports, pay equity analysis, employer survey results and census demographics should be synthesized to help create a robust rewards program that truly resonates with employees.

2. Shift more costs to employees: How will an employee value a 3% pay increase if it is eaten up with a higher employee contribution, increased deductibles and maximum out-of-pocket limits? Many times, cost-shifting is unavoidable because in previous years the employer did not take active steps to manage the health risks of their workforce. The additional financial burden to the employee will lead to higher turnover. The added attrition will stress the organization and negatively impact business operations.

3. Ignore wellbeing: The breakdown of communities, families and other social structures has put employers in the position of helping employees and their families navigate life’s issues such as depression, anxiety, financial problems, chronic illnesses, marital conflict and elder care. Pay and benefits are the foundation of Total Rewards, but a solid Total Rewards strategy should include solutions that take a holistic view of wellbeing.

4. Let employees fend for themselves: Leaving your employees to navigate the American healthcare system on their own can be a costly mistake. Employers who proactively manage health risks while engaging care navigators to steer plan participants to low-cost, high-quality healthcare providers will create positive financial results for their employees and their P&L. The results are better benefits with lower costs.

5. Only communicate at open enrollment: The quality of any relationship can be determined in part by the level of communication. Preparing a static benefit guide or compensation statement is not sufficient in relating your Total Rewards package to your workforce. Employers need to create an annual communications plan to educate employees on what is available to them. With five generations in the workforce, it is important to engage multiple mediums to reach your employee audience. While email is one method, you should also consider using social media, intranet, and interpersonal communications. Taking advantage of your organizational structure to cascade information from executives through middle managers and supervisors may be more effective at reaching your front-line employees. Why spend millions of dollars on employee reward programs, but only a fraction in communicating them effectively?

Total Rewards programs have become more complex than ever before. Executives struggle to decide which programs are the best to offer to their workforce.

• Should we offer unlimited PTO or a more generous 401k match?

• We want to offer Pet Insurance, but are employees even interested in it?

• Do our employees even understand the benefits they are currently enrolled in?

By taking all the available data into consideration, employers can create a more empirical analysis of what may appeal to their workforce. Then work backwards to create a strategic plan that includes a timeline for adding or sunsetting benefits, making compensation changes or any other necessary adjustments. This gives employers the opportunity to be better financial stewards of their Total Rewards budget and avoid these five most common mistakes.