An important step in creating better total reward packages is to upgrade your company’s human capital management systems. A modern HCM will provide a wealth of data to help reward managers make more informed decisions about the benefits and perks employees receive.
But how do you parse that data? What questions should you ask when poring over that information?
Start with the four lines of inquiry below.
Use Behavioral Data to Ask Deeper Questions
Not all aspects of a rewards package are meant to be used. That sounds counterintuitive, but it’s a helpful perspective when you start looking at benefits-usage data.
Take employer-provided health insurance, which is a highly valued benefit among U.S. employees. HR consultant Chris Renz writes at Forbes that, in his experience, somewhere between 20 and 40 percent of employees will have no health insurance claims to file in a year.
“Employees are focused on their jobs, their family and friends, and their daily lives,” Renz says. “The major benefit plans are insurance programs that are used infrequently because they are exactly that: insurance that can protect us in case something happens in the future.”
But a benefit like paid time off or annual leave falls into a greyer zone. We know that many employees opt to take less than their full annual leave. This happens in the U.S., in Canada, in the U.K., and around the world. Does that mean employees feel as if they’re leaving money on the table? Maybe not.
Some employees might simply want to feel secure in knowing that they have those holidays available, regardless of whether they use them. Others might be open to holiday trading or holiday buy-back programs. You’ll have to survey employees to get those answers.
Benefits usage data often acts as a helpful starting point. It will point you toward what questions you need to ask next.
Look to Optimize Resource Allocation With Custom Rewards
Now, imagine your data reveals imbalances in the rewards people take advantage of.
For example, say your company retreats see 70 percent attendance on average, but your onsite lunchtime workout sessions are always fully booked. Does that mean employees value their wellness benefits more than the company offsite?
Not necessarily. This is another instance in which you will need to get more granular in the data. Perhaps the 30 percent of people who don’t attend the company retreat have family obligations — but the people who do attend rave about the bonds they form with their colleagues.
Here, you could look for ways to customize rewards for 30 percent of the team but keep the retreat in place for all who love it.
Segment Remote and Onsite Employees
The example above could expose a key difference between onsite employees and those who work remotely.
Gary Cookson, author of the book “HR for Hybrid Working,” writes at Human Resources Director that it’s important to make this distinction because people who come into the office may want something very different from their employee experience than fully or partially remote employees want.
It’s worth segmenting these two types of employees against benefits data to identify patterns and to ultimately create better total reward packages.
Cookson says this is a useful starting point when reviewing benefits designed for onsite employees (e.g. cycle to work schemes, free lunches, onsite gyms). For employees who work from home most days, there might be more valuable reward categories and therefore a better use of that budget.
Assess How Well Employees Understand Their Total Reward
Finally, when you see rewards going unused, this could be an indication that employees don’t know that a specific benefit is part of their total reward package:
- If only a small percentage of employees claim vision benefits, it might be because they don’t know it’s part of their health insurance coverage.
- If a small percentage of employees are matching their 401k contributions, maybe they don’t realize that benefit is available to them.
Examples like these are common. A 2022 survey by The Chartered Institute of Personnel and Development in the U.K. found that just 57 percent of people surveyed said their employers had told them about the benefits available to them, and 53 percent had been told how to access those benefits.
This is why we emphasize making total reward visual for each and every employee. Total reward can be complex, and shrouding a benefit in fine print or legalese can make employees feel uncertain about how to access their total reward package.
To learn more about how data can help make better total reward packages, have a look at our guide Six Ways to Communicate Reward Effectively.
Images used under license from Shutterstock.com
Subscribe to our Blog & Newsletter
