When it comes to retaining employees, base pay certainly goes a long way—your people expect to be paid competitively and are likely to look elsewhere if you’re leaving them short-changed. However, as PeopleFluent Product Marketing Manager Katie Coleman explores in this article, a truly effective compensation strategy must include more than just base pay—and you’ll need a way to ensure that the total rewards you offer are relevant and valuable to all employees.

Using a Needs Assessment to Build a Foundation for Total Rewards Customization

According to ManpowerGroup’s annual talent shortage survey, 71% of U.S. employers say that they’re struggling to find the skilled talent they need—a situation essentially unchanged since 2022 and shared to a similar degree across companies regardless of size, region, or vertical.

As everyone in an HR or HR-adjacent role is aware, organizations find themselves in a talent-led market. Meeting your ideal candidate’s salary expectations is often just a foot in the door. If you can’t offer them a complete rewards package that demonstrates you value your employees and their individual needs, you may lose out to an organization that can.

But how can you make sure that the rewards you offer actually hit the mark? It all begins by conducting a needs assessment with your existing employees. This could take the form of a company-wide survey, a focus group, or a series of one-on-one discussions with a representative cross-section of the organization.

However you chose to conduct this needs assessment (and you may use multiple methods and commit to revisiting the exercise in the future), you’ll want to pursue lines of questioning that drill into your employee’s motivations and values with respect to compensation and benefits.

The following are some considerations to bear in mind when determining the opinions you need to represent, and likely lines of questioning.

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Ensure All Employee Demographics Are Represented

Employee opinions on benefits are likely to vary depending on demographic factors such as their age, race, sex, and aspects of cultural diversity. For example, a multi-generational workforce may have a variety of contrasting needs: your older employees may be less swayed by certain professional development opportunities than your younger counterparts, while employees around the typical parental age range may seek flexible work schedules.

Learn About Your Employee’s Needs, Values, and Ambitions

The actual value of a benefit to an employee may not necessarily have anything to do with its literal monetary worth. Sometimes, employees would rather you just give them a higher salary than spend extravagant amounts on flashy perks anyway! Instead, you should always be on the lookout for a broader set of ways in which you can add value to your employees’ lives. This could include:

• Investigating ways to improve and safeguard work-life balance, paying special attention to the varying needs of different employees
• Learning about your employee’s career goals and shoring up the mechanisms you have in place to help them realize those goals
• Demonstrating your commitment to fairness and equity, taking the opportunity to understand employee perceptions of your efforts, and learning about employee-led initiatives you could support
• Providing space to learn where employees feel their feedback isn’t being heard

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Factor In Your Organization’s Needs

While you ignore employee needs at your peril, the total rewards packages you build ultimately need to be aligned with your organization’s goals and values. Additionally, any spending must be balanced against potential budget impacts, and your recommendations will need evidence if they’re to attain leadership buy-in.

Your needs assessment will help to provide much of this information, but it’s worth emphasizing that the voices at the top of your organization must also be part of your plan.

Look Outside the Organization Too

The needs and opinions of your organization and its people are most important, but external sources have plenty to offer too. We encourage you to research how other organizations are approaching their total rewards programs—your competitors and your employees’ previous employers are likely to offer the experiences you’ll be most frequently measured against, but a great idea for an innovative perk could come from anywhere.

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8 Total Rewards Customization Options to Consider

The result of your needs assessment is unlikely to point towards a single, one-size-fits-all total rewards package that covers every ask—and even if it does, you may find it difficult to justify the budget required. Instead you should create a customizable and flexible compensation package that allows employees to choose components that matter most to them. Among the options you offer, you may want to consider:

Work-Life Balance and Wellness

1) Flexible work schedules
2) Customized sabbatical programs
3) Health and wellness programs

Giving employees more control over the time they spend outside of work is sometimes more valuable than incentives that target their working day. Flexible work schedules are invaluable for employees with family commitments, for example, or employees who want to fit work around specific leisure pursuits. You may also offer incentives that target longer periods of time away from work, or offer health and wellness programs that improve overall quality of life.

Career Assistance Incentives

4) Personalized career pathing and mentorships
5) Professional development opportunities

Career-related incentives are likely to be within your power to offer to employees—personalized career pathing and mentorships, for instance. Access to a learning platform and a range of high-quality courses should already be part of your HR efforts, but encouraging free access to these learning materials outside of the narrow remit of an employee’s current role may be an effective incentive (especially if you allow any topic to be studied outside of company time).

Rewards on Your Employee’s Behalf

6) Social/volunteer opportunities

According to Deloitte, 75% of Gen Z and Millennial employees consider an organization’s societal impact to be an important factor when considering future employers, and opportunities to do good in the wider community will appeal to many of your employees.

By creating connections with volunteer organizations, you make commitments that further your societal impact while giving employees the opportunity to socialize, explore different skillsets, and do good in the community. Additionally, when your organization donates to worthy causes, you can give employees the opportunity to nominate suitable worthy causes.

Assistance With Money Matters

7) Financial planning services

Employees are happy when they’re well compensated, but they’re even happier when they understand how to make their money go further and build the kind of lifestyle they want. Offering access to third-party financial services can sweeten the deal.

A Wider Culture of Personalization

8) Personalized incentives and recognition

Performance-based rewards can be powerful, but they’re likely to be more potent if you dispense rewards that align with individual likes and ensure that recognition comes in forms that individuals enjoy.

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How the Right Software Makes Total Rewards Customization Possible

Of course, you may wonder whether we haven’t skipped over an important step in discussing these benefits: is it actually possible to offer individualized packages in the first place? Certainly, in an organization with tens or hundreds of thousands of employees (or more), working out what every single employee wants and fulfilling those needs is no small administrative task.

In fact, we’d argue that without technology on your side, customization on this scale is essentially impossible. It’s fortunate, then, that technology is on your side. Platforms like PeopleFluent Compensation share your understanding that compensation strategy is more than just base pay. Compensation planning and management software of this kind makes customization possible at scale by allowing employees to self-service and choose the options that are most relevant to them. The platform will also streamline the processing and automation of analytics, create total rewards statements, and assist with communication, tracking, and feedback.