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Total Rewards: How the Definition Is Changing
It was a bounty that wasn’t destined to last. During the Great Resignation and its war for talent, employers offered workers abundant new benefits and other rewards. But now, with employee-retention numbers at high levels and corporate austerity taking hold, finance departments are looking to tighten reward budgets. That has caused some tension with HR leaders charged with attracting and retaining talent. “We’re in this constant battle with finance,” said Ken Wechsler, VP of total rewards at Akamai Technologies. “We’re fighting for it, and I would guess my colleagues on this call will also fight it. We might not get as much moving forward, but we will fight.” Weschler and three other leaders in the benefits and compensation sector of HR spoke last month in a From Day One webinar about the constantly evolving dynamic of total rewards packages. Todd Cowgill, VP of global rewards at the data-center company Equinix, says it’s essential to “speak their language” when negotiating with finance and business departments about rewards programs. “If you cannot tell what the return on investment of your program is, you will lose that program,” he said. “You have to understand what the company as a business gets because of the program, what it costs and what it gets back.” David Kirby, senior VP of total rewards and operations at the customer-experience company Epsilon, says once programs are lost due to cost-cutting, it becomes very challenging to revive them in a reasonable amount of time. “I’m very concerned about our secondary benefits,” he said. “We have a company where there’s a snack allowance. That’s the last thing I want to see removed or cut.” Working From Home a Must, But Trips to the Office Help Finding a cutting-edge company in 2023 that isn’t offering some form of work-from-home option is a challenging task, but many HR leaders believe a few trips to the office –even irregular ones–can be highly beneficial. “We give employees the choice of where they want to work, and 90% of them have said they want to work from home,” Wechsler said. “Everything is in play now–things I had never even thought of when it comes to total rewards.” Arvind Kumar, director of total rewards and HR operations in the Asia Pacific for the ad giant McCann Worldgroup, said his workplace policies are as varied as the countries of operation he oversees.The panel on total rewards, top row from left: Arvind Kumar of McCann Worldgroup and David Kirby of Epsilon. Bottom row: Lydia Dishman of Fast Company, Ken Wechsler of Akamai, and Todd cowgill of Equinix. (Image by From Day One; featured illustration by Lemono/iStock by Getty Images)“Asia has a completely different culture,” he said. “I think since Covid we aren’t planning on changing it back to how it used to be. We accepted that hybrid work is here to stay and that’s where we changed our way of working.” Kumar says some countries McCann operates in are more predisposed to working in an office environment, while workers from other Asian countries may enjoy working from home. Though quickly becoming a minority of workers, some will avoid working for a company if its work-from-home policies are too permissive. “They’ll self-select,” Weschler said. “We make the effort to do things in the office a lot–but now a lot means quarterly. We know that most will not want to come, and some folks will want to attend an event because they get to go to the office. Our recruiters ask if you’re looking to be in the office a lot because our package doesn’t include that.” All four total-ewards executives agreed that having opportunities to make intermittent trips to the office is beneficial and allows employees to expand their network by meeting new faces. Kumar says communication with prospective employees is vital for both sides to manage expectations. Fringe Benefits Are a Big Slice of the Pie HR leaders typically seek to gauge what their employees want from their organization. McGill says one of the most tried-and-true methods remains the pulse survey–a short set of questions sent to employees regularly. “That’s the short and efficient way to get into things,” he said. “But then you have to find specific ways to target whatever the issue is.” Ideas from those surveys often get implemented as policies that benefit the worker. “We have five wellness days per year. We completely shut our doors and there’s an unwritten rule that you don’t send emails on those days or on weekends,” Weschler said. “On Fridays, we don’t have any meetings–that has come from leadership.” The speakers reported that requests for childcare assistance have become less common, perhaps due to the increase in remote work that allows childcare to coincide with working. “I think people have gotten better on Zoom with the kid coming in and saying hello,” McGill said. “That blend between home and work has happened in a much more open way and, I think, healthy way than what we’ve seen in the past.” Even so, childcare policy experts warn of a looming “child-care cliff” starting at the end of this month, when many of the child-care programs supported by the American Rescue Plan Act’s stabilization funds expire. Kirby said Epsilon does not track time off for exempt employees and the organization operates on a culture of trust. “We expect folks to work and get their job done,” he said. “Sometimes that means 2 p.m. and other times that means until 9 p.m. We want people to have that flexibility.” Good News on the Health Insurance Front Despite many companies facing double-digit increases in health-insurance costs in 2023, those on the webinar reported that their companies have been absorbing the cost hikes amid the post-Covid inflationary market. “Our trend is nothing near what the market is,” Weschler said. “I’m not sure why, but we are absorbing most of it and trying to keep that minimal increase and maintain the balance of how employees and employers split health care.” Kirby says that Epsilon has also “eaten” the increase in costs at the corporate level. McGill said he attributes some of his company’s ability to absorb the increases in health care costs to an effective wellness program offered to employees. “It varies from country to country, but how do you engage with employees on health care?” he asked. “In some countries, it’s a state-run enterprise and not something we can get into.” Weschler said Akamai provides $500 in wellness reimbursement for employees to allow for fitness equipment purchases or other wellness-related items. “The working life is integrated, so we try to focus on encouraging our employees to participate in healthy activities,” he said.Tim Zyla is the managing editor of a community newspaper in Pennsylvania and has a strong interest in business and finance.
