Companies are constantly adapting to new workplace expectations driven by generational shifts, technological advancements, and a competitive job market. HR professionals face the challenge of helping businesses design compensation packages that not only attract but also retain top talent. With employees increasingly seeking flexibility, purpose, and enhanced benefits, it's crucial for companies to go beyond traditional offerings.
Here are our strategies for designing benefits packages that meet the ever-changing needs of the modern workforce.
Embrace Pay Transparency
Transparency is no longer a nice-to-have; it’s a must. We live in a digital world where information is at our fingertips so people can readily find your company online and what is being said about it, the good and the bad. Candidates and employees want straightforward information about how compensation is determined. Companies that adopt pay transparency foster trust and improve employee satisfaction from the offset, helping reduce turnover. This transparency should be front and centre on job ads – applicants should trust you from the first instance.
First impressions matter: communicate about salary ranges, bonus structures, and promotion criteria to create trust and loyalty.
Support Flexibility with Competitive Pay
There are different levels of flexibility so companies should be clear about what this means for their workforce. A lot of employees are viewing a certain level of flexibility as non-negotiable. This can mean hybrid working – a combination of home working and office-based working – flexible start and finish times, or fully remote work if the person prefers it. Employees benefit from different working arrangements; there is no longer a one-size-fits-all approach. Commute times, caregiving responsibilities, and family commitments play a bigger part in the modern workplace.
Companies wanting to retain and attract the best talent should consider their flexible workforce policies .Employees who feel trusted by their employer and empowered to create their schedule in a way that suits them and their life, will more than likely produce the best results for the company and show up as the best version of themselves.
As remote and hybrid work models remain essential for many employees, companies must ensure competitive compensation packages for a dispersed workforce. This could mean rethinking location-based pay, offering financial assistance for remote work expenses, and guaranteeing remote employees feel valued like their in-office counterparts.
Review salary benchmarks for remote roles and ensure that your company offers competitive pay regardless of where employees are based. Consider benefits such as co-working provisions or travel stipends for remote workers who occasionally need to come into the office.
Incorporate Wellbeing
Employees today value a holistic approach to wellbeing, typically encompassing physical, mental, and financial health. As a result of this focus, a comprehensive wellbeing programme has become a core part of compensation packages. By addressing employee wellness, companies can improve productivity, reduce absenteeism, and enhance employee satisfaction.
Wellbeing Initiatives:
Mental health resources (therapy, counselling, mindfulness apps)
Virtual GP appointments
Paid mental health days
Financial wellness programmes (retirement planning, debt management assistance)
On-demand health consultations
Gym discounts
Cycle to work schemes
Menopause/Andropause support
Encourage a culture that values taking time for mental and physical wellbeing. Offer programmes that can be accessed flexibly, fitting different schedules and lifestyles. Communicate with your staff and ensure the benefits are benefitting them and ask if there’s room for improvement.
Maternity, paternity, and adoption leave are a big consideration for employees: look into enhanced leave and childcare vouchers to appeal to families. As part of this, flexibility policies around childcare will appeal to parents and families.
Leverage Pay-for-Performance Structures
The workforce increasingly values career growth and skills development, particularly amongst Millennials and Gen Z. Compensation structures that reward high performers with merit-based pay increases and bonuses are increasingly attractive.
Incorporate performance bonuses or incentive programmes that offer top talent clear opportunities to earn more as they exceed targets or contribute to the company's success.
Conduct regular pay audits to identify and address any disparities in compensation. Provide ongoing training to managers to ensure that performance evaluations and promotions are conducted fairly. This transparency starts from the offset with clear onboarding stages and beyond.
Focus on Career Development Opportunities
Salary and benefits are essential, but many employees value learning opportunities and a clear progression ladder. Companies that provide ongoing learning and development programmes are more likely to attract and retain talent in a competitive jobs market. Explore the apprenticeship levy to upskill existing employees.
Offer opportunities for employees to upskill, whether through formal education reimbursements, online learning platforms, or internal mentorship. Consider integrating these opportunities into your compensation packages, allowing employees to pursue career development with backing from the company. Showing a genuine commitment to your workforce and its future fosters long-term loyalty and keeps the door open for “boomerang” employees—those who may leave but are motivated to return, bringing valuable experience back to your organisation.
Adopt Sustainability and Purpose-Driven Benefits
As awareness of environmental and social issues becomes more prevalent, employees seek purpose-driven employment. Companies that offer benefits aligned with sustainability goals or social causes resonate particularly well with Gen Z and Millennials.
Implement eco-friendly benefits such as carbon offset programmes, donations to environmental causes, or volunteer days for employees to give back to their communities. These align with employees' values and help position your company as a responsible and progressive employer.
Leverage Data and Analytics for Customisation
With the advancement of HR technology and data analytics, companies can now track employee preferences when it comes to benefits. This data can be leveraged to fine-tune packages based on what employees truly value.
Use employee surveys, engagement metrics, and HR analytics platforms to gain insights into which benefits are most utilised and valued. Customise your offerings based on these findings to maximise satisfaction and minimise unnecessary spending. This will benefit employees, HR, and the company overall, giving you the competitive advantage.
Regularly Review and Update Compensation Packages
The workforce constantly evolves, and what works today, may not be relevant a year or two later. Regularly reviewing and adjusting your compensation packages is crucial to staying competitive.
Set a schedule to evaluate salary benchmarks, market trends, and employee feedback to ensure your compensation and benefits align with industry standards, employee expectations and support continuous improvement across the organisation.
Designing compensation and benefits packages means more than just offering a competitive salary. Employees seek a holistic package supporting their wellbeing, career growth, and personal values. By embracing flexibility, transparency, and innovation, companies can create a workplace culture that attracts top talent and keeps them engaged and committed in the long run.
By incorporating these strategies, you can ensure that the compensation and benefits packages you have are competitive and reflect the future needs of an ever-changing work.
Do you have the capacity or expertise within your HR team to regularly review and develop an effective benefits package?
NRG’s HR Services team of associate consultants can seamlessly integrate with your in-house HR function to jumpstart this crucial project or collaborate on an annual basis to ensure your packages remain competitive and in line with employee expectations—all without drawing resources away from your team’s daily priorities. From benchmarking to customised strategies, we’re here to provide the support you need. Contact Catherine Hingston to explore how we can assist you in optimising your benefits packages.