Fourth quarter is a good time to begin planning your HR budget and programs for next year. If you are planning to hire in 2016, and/or you want to retain your top employees, developing and implementing a comprehensive “total rewards” program can give you a distinct advantage.
A “total rewards” program generally includes: compensation; benefits; work-life programs; performance and recognition; and development and career opportunities. Offerings in each of these categories may vary, based on the company and their budget. A total rewards program helps shape the company culture, and can be a key differentiator in attracting and retaining employees. Here are some things to consider as you put your program together.
Compensation. Think about base, variable (bonuses, commissions, profit sharing) and long term (stock options, pension plan) compensation. To be competitive, be sure you stay up-to-date on the market through surveys or other research. Establish a framework of pay levels for consistency, easier administration, and improved employee satisfaction.
Benefits. Benefits may include medical, dental, and vision insurance; life insurance; paid vacation; leave policies and 401(k) programs. Some companies choose to match 401(k) contributions up to a certain amount, which is another attractive benefit. Review your health benefits annually to ensure they are cost effective and that you are getting the appropriate level of service from your broker.
Work-life Programs. This is a relatively new area, and gives companies the opportunity to be creative and provide some unique and generally low cost “perks” to their employees. Some of the things offered in this category are telecommuting, flexible scheduling (e.g., every other Friday off), onsite daycare centers, and onsite services such as car washes and dry cleaning. Wellness programs are also increasingly popular. These may include Employee Assistance Programs (EAP), legal referrals, money management clinics, nutritional counseling, disease management programs, and programs to help employees quit smoking.
Performance and recognition. Employees need – and want – regular feedback. In addition to your annual performance review, be sure you factor into your plan training for your managers on the value of regular feedback. Recognition can include cash awards, or non-cash awards such as sports event tickets, travel vouchers or other “thank you” gifts. I always recommend that managers take the time to find out from individual employees how they like to be recognized.
Development and career opportunities. This is one of the areas that comes up most often in employee engagement surveys as a weakness. Too many companies sacrifice learning and development because of time or budget concerns. As you plan for next year, think about how you will provide your employees with opportunities to develop in their current position and prepare for the next one. In my next blog, I’ll give you some ideas on how to do this effectively.