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The Importance of Total Rewards Compensation


Employees care more about employee benefits than ever before, with nearly 54% of job-seekers saying they would consider a lower paying job with a better benefits package.

Because of this, it has never been more important for employers to showcase their Total Rewards Compensation – the cash and non-cash value they provide to prospective and existing employees.

A well-planned out Total Rewards Package can not only help you attract talent in a tight labor market, but can also provide awareness of compensation and benefits offerings among your existing employees and increase overall satisfaction and engagement.

Despite this, however, many employers lack a Total Rewards package, and are therefore missing out on a vital opportunity to proactively attract, engage and retain talent.


What is Total Rewards Compensation?

Total Rewards Compensation is a combination of total compensation and other, non-monetary employee benefits.

Total Compensation itself comprises both direct and indirect employee compensation – in other words, the full financial value that employers offer to their employees.

Direct compensation includes any money that is paid directly to an employee, whether through salary, hourly wages, bonuses, and/or commission.

Indirect compensation consists of non-direct cash benefits provided to employees, including but not limited to Health and Wellness programs, Retirement Savings programs, Stock Options, Profit Sharing, etc.


Building Out a Total Rewards Package

For employers to build out an effective Total Rewards Compensation strategy, they must also consider and include their non-cash related benefits and perks that help contribute to their employees’ overall wellbeing.

This can include flexible work scheduling, a positive workplace culture, learning and development opportunities, and more.

As employers build out their Total Rewards package, they should consider and include both direct and indirect compensation sources, as well as non-cash benefits. Typical sources to incorporate include:

  • Salary, hourly wages, bonuses and/or commission
  • Retirement Savings Plans
  • Health and Wellness plans (including Medical, Dental/Vision, Life and Disability)
  • Paid Time Off (including vacation, sick, personal and holidays)
  • Flexible Spending Accounts
  • Flexible Work Hours/Scheduling
  • Employee Perks (education assistance programs, learning and development opportunities, childcare assistance programs, company discounts, etc.)


Communicating Total Rewards

Communicating Total Rewards to employees should be an ongoing and leading priority for HR managers, especially in today’s market.

Michele Underhill, Manager of HR Client Services at XpanseHR, advises employers to determine what works best for their workforce when determining how to effectively share their Total Rewards:

“When it comes to communicating Total Rewards Compensation, there is no one-size fits all. Some employers will have robust Total Rewards Portals that allow employees to view and interact with their benefits in real time. Others will have to gauge their workforce to determine what works best – perhaps by surveying the workforce and identifying different methods to share total rewards information. This can be in the form of routine email communications, department meetings, lunch and learns, all hands meetings and even electronic or printed booklets.”

The important thing for employers to focus on is that they convey the value that they bring to their employees’ financial and overall well-being and the many benefits of being an employee at their company.


Learn How XpanseHR Can Help

XpanseHR’s Human Resource and Compensation experts help businesses build out, implement, and communicate Compensation and Total Rewards programs that work for their business and their workforce. To learn more, contact Jim Jeffers at 610-614-5500 ext. 101 or