When it comes to traditional rewards packages, technology has been a great equalizer. Piles of data have been analyzed by tech companies that deliver insights on exactly what combination of pay, benefits and perks make up a competitive compensation package–and they all end up in the same ballpark. So how can employers set themselves apart?
Enter total rewards: a reimagining of compensation as everything with perceived value that a company provides its teams in exchange for their work spanning both financial compensation and non-monetary rewards.
Compensation benchmarking tools like Korn Ferry Pay allow organizations to access comprehensive compensation and benefits data globally and analyze internal and external pay practices to compare against competitors and ensure strategic compensation planning. In a job market where cash only gets you to the table, it’s the non-monetary rewards that often become the deciding factor for retaining and engaging the best and brightest talent.
Standing out with non-monetary rewards
Non-monetary rewards are all the unique things about your company that make someone love where they work.
“Forward-thinking companies are embracing a holistic approach to what they offer employees that puts heavy emphasis on the intangible benefits of working there,” says Brian Reidy, Global Practice Leader, Workforce Rewards. “When we talk about building a strong corporate culture, quite often it’s the culmination of these non-financial rewards."
Programmatic, non-monetary rewards like flexible working arrangements and professional development opportunities that can be clearly articulated and described in some detail are key to recruitment, while more nebulous incentives that shape a positive daily experience play a critical role in retention.
“Effective total reward programs are about giving the right people the right type of rewards for doing the right things at the right time,” says Tom McMullen, Senior Client Partner, Total Rewards. “Getting all these components correct isn’t easy, but when it happens, that’s where the magic lies– you’ve built a powerful program for attracting, retaining and engaging your top people.”
4 types of non-monetary incentives
Non-monetary rewards, unlike their financial counterparts, look different at each company but can be looked at through four buckets: recognition, training and career development, an energizing environment, and meaningful work. Your total rewards program should include a mix of these, customized to meet your talent acquisition and retention objectives.
How your organization chooses to recognize your employees and motivate future performance is a direct reflection of your company culture and values. Cash incentives like bonuses are just one component of effective recognition programs. Praise and validation–especially when given publicly–can be equally important.
As you evaluate the effectiveness of your programs, consider who does the recognition, who gets recognized, and how this recognition is given. For example, is it typically a top-down approach led by management and supervisors, or are there opportunities for employees to recognize their peers? Frequency matters, too: is there an annual nomination process for company-wide awards, monthly star performers, or weekly shout-outs?
Finally, consider the type of recognition. Performance-based programs can recognize people for meeting a monthly goal, landing a major client, encouraging collaboration or other metric-based goals. For teams where metrics are a critical success component, dashboards, leaderboards, or other gamification approaches can further reinforce and incentivize performance and drive results.
2 Training and career development
Current workers, particularly early- and mid-career employees, have shifted their career priorities toward professional growth and development, and their top motivation to learn is progress towards career goals, according to LinkedIn’s 2023 Workplace Learning Report.
“Top talent wants to join and stay at a company demonstrably invested in the growth and success of its employees,” says McMullen. “A blend of formal and informal development opportunities plus a track record of employees successfully growing from junior and mid-level roles into senior leadership tells a compelling story for recruitment and supports retention.”
Employees may receive an annual professional development stipend, be part of fast-track development programs, have access to formal ongoing education or be part of mentorship programs. You can take these benefits to the next level by ensuring what you offer aligns with what employees value and need. If paid development is available, do people have time in their schedule to take advantage of continuing education opportunities or attend conferences? Do mentors make themselves regularly available to their mentees? Access impacts usage, which impacts how employees perceive the value of these programs.
Through skill enhancement and leadership development, opportunities for learning and development strengthen employee loyalty, enhance engagement, and help them envision a long-term future at your company. Examples include the chance to lead teams and tasks, attend paid trainings, and meet one-on-one with senior leadership.