The market for workers, especially top talent with high-level skills and experience, is extremely competitive. Employers need to stand out to attract and retain the best workers, and offering strong compensation plans is one of the best ways to accomplish this. Compared to the various compensation programs employers use, a total rewards strategy may position your company as an employer of choice in this competitive market.
This guide will help you to create and implement an effective total rewards strategy for your global team.
What is a total rewards strategy?
A total rewards strategy is an approach to compensation and benefits designed to motivate workers to work more productively. This strategy goes beyond basic compensation—like salary and wages—to include other components, such as:
- Benefits: Paid time off (PTO), health insurance, retirement plans
- Career development opportunities: Mentoring programs, courses, seminars, tuition reimbursement
- Work environment: Wellness programs and team-building activities
- Recognition: Awards, incentives based on performance, informal acknowledgment of accomplishments
- Work-life balance: Leave policies, support services, flexible work schedules
Benefits of a total rewards strategy
There are many benefits to organizations that implement a total rewards strategy, such as:
- Better employee retention
- A positive work environment
- Higher employee engagement
- Increased employee productivity
- Easier recruitment of top performers
Even though total rewards systems are meant to suit employees’ needs better, they also offer a variety of benefits to employers. From making it easier to attract and retain top performers to improving the work culture in your organization, a total rewards strategy can prove very useful.
Disadvantages of total rewards
Using a total rewards strategy isn’t without some disadvantages to consider. The primary disadvantage of this strategy is that it may increase your overall employee costs. Other compensation plans may be more affordable for the employer because they are generally less comprehensive.
Getting a total rewards strategy in place can also be time-consuming initially. This new strategy will require organizational change and buy-in from key stakeholders.
Challenges of implementing a total rewards policy globally
The main challenge of implementing a total rewards policy—or any compensation strategy—with a global team is meeting everyone’s unique needs. For example, a team member in the Philippines will likely have different needs from someone working in the United Kingdom. You need to craft a cohesive policy that addresses the different needs of your global team members.
Part of operating globally is also staying on top of all the local laws and regulations where your employees work. Your global total rewards policy must take into account these local considerations to avoid hefty fines and backlash.
7 steps to creating a global total rewards strategy
1. Assess your organization’s needs and objectives
Before you put any new global compensation strategy in place, you must take time to consider your organization’s needs and objectives. What are you hoping to get out of your total rewards strategy? What outcomes would make the strategy a success in your eyes? Identify the goals of your total rewards strategy so you can work toward them more effectively.
You also need to understand the unique needs of your global team members. Workers in places around the world may have very different needs compared to workers closer to home. Check in with your workers and ask what they value, so you can design a total rewards package that takes their feedback into account.
Finally, consider your organization’s culture and values. Beyond meeting your workers’ needs and helping your organization achieve its goals, your strategy should also align with your company values. Rely on your values to guide the development of your total rewards strategy.
2. Perform market research
If you want to create a compensation plan that will make you a more appealing employer, you need to understand what types of plans other employers offer. Start by researching industry benchmarks and best practices. What is the standard compensation plan in your industry? What do workers in your industry expect from employers?
Then dig deeper and analyze competitors’ total rewards strategies. Find parts of their strategies that work well and suit your company’s needs. Also, take the time to gather information on regional compensation and benefits standards. This can be challenging if you have a global team spread all over the world, but it’s crucial to keep in mind the standards that affect your business.
3. Develop a comprehensive total rewards framework
The next step will be to actually develop the framework for your total rewards strategy. You’ll have to decide which specific rewards strategies work best for your workers and your organization as a whole.
Consider that a comprehensive total rewards framework goes beyond compensation appropriate for the location and role. Other components—like benefits, non-monetary benefits (work-life balance and flexible hours, for example), and development and career opportunities—are just as important to the strategy.
Ask for input from your global team members to gain a better understanding of what they want and need from the rewards strategy.
4. Establish clear communication channels
For your total rewards strategy to have an effect, your entire organization needs to understand it. Establish clear communication channels and ensure transparency regarding your total rewards strategy.
Communicate the strategy effectively to all team members across different regions. Make sure to tailor the communications to each location as necessary. You can provide resources and support to help employees as appropriate.
5. Implement the strategy consistently across all regions
Once you communicate the strategy, it’s time to implement it across all the regions where your global team members operate.
To ensure compliance with local laws and regulations, consider partnering with local HR teams or third-party vendors to manage regional variations. Be aware that your original strategy may not be perfect as you implement it. You should monitor and adjust the strategy as needed to maintain consistency.
6. Measure and evaluate the effectiveness of your total rewards strategy
The only way to know how well your total rewards strategy is working is to measure and evaluate it over time. Establish key performance indicators (KPIs) to measure success. Then be sure to regularly review and assess the impact of the total rewards strategy on employee engagement, retention, and performance.
Based on the feedback and data you gather, make changes to continuously improve the strategy. What works well today may not suit the needs of your organization going forward, so be prepared to make changes.
7. Foster a culture of recognition and appreciation
Adopting a total rewards strategy on paper isn’t enough. If you want to reap all the benefits of total rewards, you must also foster a company culture that values recognition and appreciation.
Try to encourage and promote a culture of recognition within the organization. Provide regular feedback and celebrate employee achievements, big and small. This culture shift may take some time, but it will pay off in the long run when paired with concrete total rewards measures.
Choose Oyster to help guide your total rewards strategy
Every company has to continuously adapt and improve to stay ahead of the competition. Market conditions and needs are always changing, and businesses need to change with them to keep up. That’s especially true with regard to attracting and retaining top employees.
A total rewards strategy is a great way to stand out as an employer and show employees that they matter. Leaders should prioritize employee-centric approaches in their total rewards strategies to get the maximum benefits for both their employees and their businesses.
Reward your global team with help from Oyster Total Rewards, part of Oyster’s global employment platform.