Personalised Pay: Go ahead, we're listening
In the past, it was typical for a company to provide all employees with access to the same group benefits – regardless of their age, demographics, or education level. From health insurance to retirement plans and paid time off, these uniform benefit packages were designed to meet the needs of the entire workforce in one fell swoop.
However, within the past few years, these off-the-shelf benefit options have presented a bit of a challenge. With five generations now in the workplace – Gen Z, Millennials, Gen X, Baby Boomers, and the Silent Generation – there are diverse expectations about pay and benefit packages.
For example, Baby Boomers and the Silent Generation tend to value a robust retirement plan. Meanwhile, Gen X workers seek a healthy work-life balance, advancement opportunities, and a competitive benefits package. Millennials and Gen Z prioritise flexibility – they want more paid time off, the ability to work when and where they wish, and tuition reimbursement.
There is no one-size-fits-all compensation package that can fairly satisfy each generation of workers. Employees today want to feel heard, understood, and cared for by their employer. Furthermore, most want a job that fits with their personal interests and lifestyle.
As a result, companies are moving away from traditional group benefits and taking a more personalised approach to compensation.
Many organisations are using social listening tools, focus groups, and surveys to gather information about the types of benefits employees want. Others are taking it a step further and having one-on-one conversations to determine what motivates each individual worker and provides them with a sense of purpose at work. How else will we know what, specifically, each employee wants unless we ask them?
By collecting this information, organisations can tailor packages that effectively meet the varying wants and needs of the diverse workforce. They’re offering mixes of pay, bonuses, flex time, paid time off, retirement plans, student loan repayment assistance, and professional growth opportunities. Some companies have designed an à la carte menu of benefits, with which employees can pick and choose the perks they care most about.
According to a recent survey conducted by WorldatWork and Korn Ferry, organisations are also offering more non-traditional benefits that can further acknowledge employees’ concerns and responsibilities outside of work. Eldercare resource and referral services, female advancement initiatives, and disaster relief funds all became significantly more prevalent in employee benefits programs within the last year. Telemedicine, identity theft insurance, and paid parental leave offerings increased as well.
And many organisations are taking innovation one step further. One firm recently introduced a new benefits reward program in which employees earn points based on both personal and company-wide achievements and then cash them in for perks across various categories: health and wellness, travel, housing, transportation, time off, annual grocery passes – you name it. The purpose is to give employees the power to choose the types of perks that mean the most to them.
The unemployment rate is the lowest it’s been in decades and the war for talent is extremely tough. The average tenure for workers is 4.6 years – but for millennials, it is half that.
This sort of high employee turnover can take a massive toll on a company’s bottom line: experts estimate that it can cost up to twice an employee’s salary to recruit and train a replacement. Not to mention, employee churn can damage company morale and tarnish your business reputation.
Customised pay and benefits plans can make an employer be more attractive in a tight, crowded job market. If you want to not only attract top talent but retain them as well, it’s worth taking the time to understand what matters to your candidates and offering them personalised pay and reward packages.
Organisations need to introduce more flexibility into their pay packages and adapt to the needs of the changing workforce. After all, when you invest in your employees, you invest in the overall success and performance of your business.