Total rewards evolving to suit workforce of the future: Mercer

While total rewards were once based on pay and benefits in an attempt to cultivate long-term employee loyalty, the concept has evolved, according to Mercer Canada’s Gordon Frost.

“We are focusing more on, in addition to pay and benefits, things like achievement, camaraderie, do we have equity in our pay?” said Frost, partner and career business leader, during a Mercer event on Wednesday at Toronto’s Design Exchange. “Are we providing fairness? Are we providing good experiences for people? We want to have a broader set of rewards that generate not just loyalty — because maybe we only want loyalty for the short term — but we want engagement. We want employees that are engaged, we want employees that come to work and give their best effort.”

Read: Personal connection key in managing young employees

While total rewards is currently concentrated on the so-called engagement contract, according to Frost, he sees it heading towards something he calls the thrive contract. This encourages thriving organizations and individuals; reinforces a belief that an employer cares about more than just employees’ basic needs; and provides purpose, meaning and an opportunity to impact the world people live in.

“More and more, especially the younger generations, are telling us that’s what important to them,” said Frost.

Human resources professionals need to consider three things as they focus on the future of the industry, engage the workforce of the future and prepare for the year ahead, he added.

Read: Do millennials really prefer perks to salary?

“First of all, it’s harnessing the power of your data to understand your employees’ needs and develop a total rewards offering for them. Second is then using that data to define a more holistic total rewards strategy that meets the needs of each of your employee segments in a personalized and relevant way; not the one-size-fits-all [approach] that we used to have in the 80s and 90s, but really an individualized value proposition that’s relevant to each segment of your employee population.”

Lastly, Frost added, is having an effective channel to deliver those rewards that creates an emotional connection, is easy to use, customizable and simple. “I believe if you do those three things you will be successful in creating a thriving entire employee population because you will have the total rewards proposition that’s tailored to each of your segments,” he said.