beyond base pay

total rewards strategy

Secure the employees you need with a robust total rewards program

According to Mercer’s 2022-2023 Global Talent Trends study, 89% of HR professionals surveyed say improving total rewards is a top priority. An effective total rewards strategy has a positive impact on employee engagement, employee retention, employee performance and a whole host of other indirect benefits.

What are the key elements to a total rewards strategy?

A complete total rewards strategy offers more than just a financial reward and goes far beyond direct compensation. Combining key total rewards components can help your organization attract, motivate, engage, and retain the employees you need to drive desired results.

The 5 key elements to total rewards are:

  • Compensation
  • Benefits
  • Flexibility
  • Well-being
  • Career development

A good reward strategy starts with compensation

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You’ve probably seen the headlines about how employers are looking beyond pay to compete in today’s chaotic labor market. Which is true. For employees, base salary is becoming less of a determining factor in the value when considering job offers. But the reality is you have to get pay right for anything else to matter. Paying competitively will always be an important benefit employees value.

And, it’s not only about what you’re paying but also about how you’re paying .

Getting pay right

Understanding how your employees’ current pay compares to the market is critical to managing pay effectively and securing the employees and skills you need. Mercer salary surveys give you keen insight into what’s really going on in the market so that you don’t overpay for talent — or underpay and miss out. As the demand for new jobs and skills intensifies, proactively address areas where you are out of alignment and make sure to preserve the talent you have.

Whether you need pay data for, a specific location, insights on industry jobs, or regional benchmarks, Mercer has company-reported, validated data for thousands of positions to help you ensure market competitiveness.

 

Mercer Benchmark Database

Mercer’s most robust salary database provides pay data across skill levels and career streams, from traditional roles to emerging positions, to help you get pay right — more than 6,000 positions available.

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Industry Salary Surveys

From energy to financial services to healthcare and retail, Mercer industry salary surveys help you figure out what you need to pay to compete in your industry.

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How you pay is important

Over time the purpose of base pay has shifted. Where individual performance was once rewarded through annual increases, now more employers are using short-term incentives, bonuses, or other forms of variable pay to reward employees. As pay mix continues to evolve for different jobs, it’s easy to validate your compensation strategy against competitors and the larger market with Mercer products.

 

Compensation Policies & Practices

Explore what’s common for key compensation policies and practices, such as, shift premiums, overtime, paid time-off, continuing education, and more to enhance your strategy and ensure employees see a benefit.

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Incentive Plan Design

Assess key design elements of your short-term or sales incentives programs, including eligibility, funding mechanisms, and payout options to strengthen how you reward individual performance.

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Short-term Incentives

Understand how your short-term incentive program aligns to the market for key metrics like target amount, percent of base salary, percent receiving, and total cash compensation to ensure your package is compelling.

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Long-term Incentives

Benchmark your long-term incentives plan by percent eligible, percent of base salary, total cash and total direct compensation, and more to certify you’re motivating employees to grow with your organization.

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Differentiate your total rewards package with employee listening

While pay is the foundation, companies competing on total rewards are considering what employees want by increasing employee listening and employee engagement. When managers listen to what employees want then they can craft a more meaningful total rewards package, win top talent, and drive higher employee satisfaction, engagement, productivity, and retention.

Mercer is now referring to the Global Talent Trends report as “2022-2023 Global Talent Trends” so please put the year range within that reference/link text.

 

Unmet Needs Analysis

Through a set of trade-off questions, gather critical insight into the changing needs of your workforce. Understand what employees are most concerned about in and outside of work.

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Digital focus groups

Virtually facilitate dynamic discussions with up to 1,000 employees to gain insight on one or many topics at a time. With real-time results, you can quickly get the insights you need to guide your path forward

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Mercer Rewards Optimizer®

Let the experts at Mercer help you optimize your total rewards strategy and ensure that your employees are getting the rewards that they value most at an efficient cost to your organization.

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Rounding out your total rewards strategy to better compete

Once you better understand what employees want and need, think about what you can offer beyond pay by considering questions like:

  • Do our benefits effectively cover all employees — are we inclusive?
  • Are there health and wellness benefits we should be offering?
  • Do our employees feel like there is a work life balance?
  • Is flexibility, at some level, a component of all jobs?
  • Are people taking time away from work differently now?

Here are a few reports to help you understand what others are doing in this space.

 

Inclusive Benefits Report

Offering benefits that recognize the needs of all employees is an important component of any DEI strategy. Explore market practices around benefits for pregnancy-related care, LGBTQIA+ benefits, mental health, and more.

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Leave Programs

From paid family leave to addressing new employees’ vacation time, make sure your leave programs are effectively motivating your people.

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Flexible Working Policies & Practices

As flexible work options, in one form or another, become the norm, explore what other companies are doing around flex work eligibility, flexible arrangements, and more to benchmark and adjust your approach.

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Pro tip: No matter how you choose to adjust your total rewards offerings, the most important thing is to make sure you’re clearly communicating with your employees. After all, the best offerings mean nothing if your employees don’t know about them or understand them.