In today’s candidate-driven market, attracting and retaining top talent goes well beyond the paycheck. While a competitive salary remains essential, forward-thinking companies are focusing on their total rewards package to stand out from the crowd.
What does this mean in practice? It’s the full spectrum: benefits, perks, professional growth, and even elements of company culture that contribute to employees feeling valued and motivated.
The good news is that the same principles of salary benchmarking can be creatively applied to build a compelling total rewards strategy that gives you a true competitive advantage.
Why Benchmarking Total Rewards Matters
Understanding what similar companies offer in terms of benefits and perks is essential to ensuring your packages don’t fall behind. In a competitive marketplace, you don’t want to find yourself with generous salaries but outdated perks that make you less attractive to top talent.
Data-driven benchmarking, supported by compensation management software, enables HR teams to stay agile and quickly pivot benefit offerings when needed.
Meet Evolving Expectations
Employee priorities continue to shift, and what was considered a “generous” benefits package a few years ago might simply be standard today. Younger generations, in particular, place great value on things like flexible work options, generous parental leave schemes, and demonstrable company commitments to well-being and work-life balance. Benchmarking helps HR teams keep a finger on the pulse of these expectations and align their benefits accordingly.
Employer Branding Boost
A well-rounded total rewards package shapes your reputation as an employer of choice. This has a ripple effect: it makes attracting top talent easier, reduces your reliance on costly recruitment strategies, and reinforces a positive reputation in the industry. Even if you don’t always match competitors perk-for-perk, showcasing that you take a thoughtful, data-informed approach to total rewards benefits your employer brand.
Data-Driven Decision Making
Gut feeling has a limited place in modern HR. Benchmarking your total rewards against reliable data empowers you to advise company leadership on benefits spending. It allows you to justify adjustments, demonstrate the ROI of initiatives like expanded professional development, or make a case for a more generous pension contribution model.
Reduced Churn, Improved Retention
A robust total rewards package is a powerful retention tool. When employees feel their needs are valued beyond just a payslip, they are far more likely to remain loyal to the company. This saves costs associated with constant recruitment and knowledge gaps left by departing talent.
What to Benchmark: Thinking Beyond the Traditional
Pension Contributions and Plans
Employer matching contributions, vesting schedules, and flexibility in pension plans heavily influence employees’ long-term financial security and their perception of their benefits. Pay particular attention to pension flexibility – the ability to adjust contributions based on life events, for example, is becoming a sought-after feature, especially within younger demographics.
Time Off, Flexible, and Family-Friendly Policies
Generous holiday time, flexible schedules, and robust parental leave policies are increasingly sought-after by employees. Benchmark not just the number of leave days but also any policies surrounding their usage. Are employees truly encouraged to take their full holidays allowance or is there unspoken pressure to keep working? Can remote work or reduced-hour options be accessed with ease?
Professional Development Opportunities
Company-sponsored training programs, tuition reimbursement, opportunities for mentorship, and career progression paths are highly valued, especially by ambitious individuals driven by growth. Look beyond course offerings to include things like job shadowing programmes, a dedicated budget per employee for skill development, or tie-ins with external training providers.
Perks That Matter
From subsidised gym memberships to transport allowances or even cycle-to-work schemes, these “extras” can offer real value. Benchmarking them along with traditional salary benchmarking helps reveal ways to add perks that fit your budget and resonate with your workforce. Don’t just benchmark the existence of a perk, look at its value—is it a token gym discount or a significant contribution towards public transport costs?
Culture as Compensation
Offering remote work options (where the role allows), opportunities for internal mobility, and demonstrating strong company values are factors that shouldn’t be underestimated.
They are key parts of what makes a workplace desirable. Benchmark these less tangible factors by analysing things like company Glassdoor reviews, the ‘perks’ pages of competitor websites, and industry chatter about policies like unlimited PTO and truly flexible arrangements.
Finding the Data: Sources for Reliable Insights
- Industry Surveys and Reports: Tap into credible data providers specialising in compensation management and HR insights specific to your market.
- HR Communities & Networks: Don’t underestimate the power of peer-to-peer knowledge exchange! Get insights from fellow HR professionals, particularly those working in non-competing industries.
- Analyse Job Postings: Carefully reviewing job postings reveals a lot about the types of benefits and perks your competitors are highlighting.
- Compensation Management Software: Invest in software like Figures.hr, which centralises not only salary data but also tracks benefits and total rewards trends, giving you a holistic view.
Turning Insights Into Your Strategy
- Highlight Your Strengths: Let’s say your benchmarking reveals that your pension contribution scheme is far better than the industry average. Make this a core part of your employer branding! Integrate it into your job postings, emphasise it during interviews, and consider creating employee testimonials focusing on this aspect of your total rewards package.
- Prioritise Flexibility: Choice is key. Offering a variety of options within benefit packages (where your budget allows) is extremely appealing to potential employees. Benchmark ideas like tiered pension plans, a menu of professional development options, or even smaller-scale things like a selection of healthy snacks in the office catering.
- Don’t Copy, Innovate: A tailored total rewards strategy aligned with your company’s values and resources will be far more successful than merely trying to replicate competitors’ offerings. Maybe you can’t match a larger company’s private gym, but you could benchmark local wellness partnerships for discounts on classes and services. Use your strengths to get creative!
- Data for Internal Advocacy: Benchmarking isn’t just about outward competitiveness. Let’s say your data shows low take-up on certain existing benefits. Armed with this information, you can dig deeper. Are employees unaware of what’s available? Does the process need to be streamlined? You can now make informed proposals to improve the utilisation of the total rewards you already offer.
- Communicate Your Thoughtfulness: Even if you’re unable to immediately change every aspect of your benefits, you can win employee trust by demonstrating you’ve done your homework. Consider sharing high-level benchmarking insights in a staff newsletter, framing it as a commitment to staying competitive and valuing your workforce holistically.
Pro Tip: Companies specialising in compensation management software often offer resources, analysis tools, or even consulting services to their clients. Leverage what your software provides to make these strategic steps even easier and more data-driven.
Ready to Elevate Your Total Rewards Game?
Start by taking a closer look at what your company offers and what aspects are most important to your employees. By adopting a data-driven approach to benchmarking, –aided by tools like specialised compensation management software – HR teams can build total rewards packages that attract, retain, and ultimately motivate the talent that drives business success
Awais Shamsi