The following article - on the key HR theme of Reward - has been written in conjunction with the eponymous IRS conference which took place on 25 April 2007.
Providing a comprehensive rewards package is a key objective for employers as they seek to recruit the best talent around and retain their best individuals.
Non-financial benefits (monetary and non-monetary) are assuming an added importance and organisations need to keep apace with the requirements of their staff and adapt their approach to suit.
According to research carried out by Innecto Reward Consulting, more than 60% of HR managers felt that their current schemes did not motivate their staff.
“Companies are having to be creative – for example, training is becoming more and more of a key benefit,” says Heidi Waddington, national director of Hays Human Resources.
Historically, benefits programmes were hierarchical: holiday entitlement and pension provision typically increased with seniority and length of service.
The logic behind this was one of homogeneous simplicity; these benefits could be easily understood and rolled out by multinational organisations in all their countries.
This concept is now being superseded by a benefits model, which gives employees a greater say in determining their preferred trade-off between salary, core and more flexible benefits.
The result is that the employee can, for example, decide whether or not to sacrifice a part of their salary in return for an increased portion of the flexible/core benefits trade-off. Similarly, they could opt for a greater slice of the salary pie and reduce their other benefits.
By far the greatest advantage for the employee is that, irrespective of age, he or she can tailor their preferences to suit.
For example, a graduate might prefer to have a reduced level of benefits in return for a greater salary (perhaps to clear their student debt) while another employee might prefer more annual leave (to suit their family circumstances). In both scenarios, the total level of total reward remains the same.
Some of the advantages of adopting a total rewards package include:
The key to making an organisation more attractive to employees is to have an in-depth understanding of the workforce and demographics. “People are only too willing to tell you about bonus schemes and what they feel is working or not,” asserts Deborah Rees of Innecto Reward Consulting.
To this end, employers have a range of tools at their disposal, from corporate websites and intranets through to a whole range of in-house literature and external advertising.
The key to making it all work is ensuring that the message is clearly delivered. “I cannot emphasise enough the need to communicate your rewards package,” stresses Mark Burch, former Head of Reward and Performance at the Crown Prosecution Service (CPS).