Health insurance and retirement plans may be the most commonly thought of employee benefits, but they are only part of a total compensation strategy, and, as employees need to consider all of their benefits together, some companies now embrace a holistic approach as well.
Formerly referred to simply as “compensation and benefits,” total rewards is a way to consolidate all benefits and perks awarded to an employee as a result of his employment. Besides just the traditional health care, retirement and dental, additional benefits may be important to offer for a total rewards strategy, sources say. With this recognition, employers are working to determine what those benefits might be and how to finance them.
Brian Coleman, vice president of total rewards and HR [human resources] Shared Services at Dawn Foods in Jackson, Michigan, says employers should have a written total rewards or holistic benefits strategy. It should tie in with the mission of the organization and be nonspecific. For example, he says, the strategy of Dawn Foods is to be market competitive. “Things we will offer are in the market, required by the market and what people want,” he says.
Kevin Wagner, senior consultant with Willis Towers Watson in Detroit, agrees with Coleman that employers should have a written definition of what they hope to accomplish with their benefits strategy. It should guide benefits decisions for a changing work force and changing regulatory environment. “The written statement should have five or six areas of focus: the purpose of benefits [e.g., to attract and retain employees, to make sure they are financially well, to make sure they are able to retire on time]; how to engage employees; how to measure the value of benefits and return on investment [ROI], how to finance your benefits; and how to make decisions based on regulations,” he says. Story Continued Below