7x7 EVP Framework, Part Seven: Employee Remuneration and Benefits

Looking to attract, retain and motivate talented employees? In today's competitive job market, where talented individuals have more opportunities than ever, companies must have a compelling remuneration and benefits package — or risk missing out on top talent. 

Offering enticing perks beyond traditional salaries or wages is one of the ways organisations are winning talent with their employee value propositions (EVP). It’s about rewarding individuals’ contributions fairly and meeting their needs alongside those of the business. 

In closing our 7x7 EVP Framework Series, we cover the importance of employee remuneration and benefits, the types to consider and how to design an attractive compensation package. 

Why provide both remuneration and benefits? 

Simply put, a remuneration and benefits package is the total compensation and benefits an employee receives in exchange for their work. This includes salary or wages and additional benefits, such as health insurance, additional leave entitlements and other perks.

Your EVP should include competitive remuneration and great benefits. The top reason is to help attract top talent. When candidates are considering job offers, one of the first things they check is the compensation and benefits. If an organisation doesn't offer competitive pay and benefits, they are likely to lose out on the best candidates.

An attractive remuneration and benefits package can also help retain current employees. In today's competitive job market, talented individuals are often approached by recruiters from other companies offering better pay and benefits. If an organisation wants to keep its top performers, it needs to offer them a compelling reason to stay.

Additionally, great benefits motivate employees to perform at their best. When employees feel they are compensated fairly and have access to valuable benefits, they are most likely to be engaged and committed to their work.

Creating an employee remuneration and benefits package isn't about throwing money at people to buy loyalty. Rather, it is about designing a package that meets the diverse needs and desires of your workforce. For example, younger talent may place greater value on flexible work arrangements, unlike talent approaching retirement age.

Components of employee remuneration

Leaders need to be strategic when designing a remuneration package. This means gathering data on employee preferences and needs, benchmarking against industry standards and involving finance teams to ensure the offering is attractive to employees and financially sustainable for the organisation.

Determining competitive salaries or wages is the place to start. That doesn’t involve setting the highest salaries in the industry — it’s a matter of paying a fair wage in line with industry standards, awards (if applicable) and the region’s cost of living.

In addition to a competitive salary, many employees value benefits such as health insurance, additional superannuation contributions and paid time off. Health insurance is particularly important as it can be expensive for individuals to purchase. Extra superannuation contributions over and above the super guarantee are also highly sought-after by employees concerned with maximising their retirement savings. 

Paid time off is another benefit. While there are minimum leave entitlements under the National Employment Standards (NES), organisations can offer employees additional benefits, for example, extra annual leave or birthday leave.

In addition to these traditional benefits, many organisations offer wellness perks such as gym memberships, free snacks and even on-site massages. They may not be essential but do contribute to a positive work environment and make employees feel valued. Flexible work arrangements, such as telecommuting or flexible schedules, are also increasingly common benefits.

Finally, it's important to note that a remuneration package is just one component of a company's EVP. While it's a critical component, it's not the only factor employees consider when deciding whether to work for a company. Other important factors include the company's culture, values, career development opportunities and work-life balance.

EVP Framework: designing compensation packages

1. Conduct a thorough analysis of your workforce. Before designing your remuneration and benefits package, understand the needs and preferences of your workforce. Conduct surveys, focus groups or interviews to gather data on the types of employee compensation and benefits valued most.
2. Benchmark against industry standards. Once you understand the needs and preferences of your workforce, the package must be benchmarked against industry standards. This will help ensure the package is competitive and that you're offering the types of benefits expected in your industry.
3. Design a package that meets diverse needs. Every individual has different needs and preferences for employee compensation and benefits. Design a package that meets the needs of different employee segments, such as younger workers, more mature workers or those with families.
4. Consider flexible work arrangements. Flexible work arrangements, such as telecommuting or flexible schedules, are highly prized by many employees. Consider offering these arrangements as part of your package.
5. Don't forget about non-monetary benefits. While salary and traditional benefits are important, be sure to include non-monetary benefits that go far in employees' feeling valued. Pay attention to your research findings from Step 1 for guidance.
6. Communicate the value of your package. Once you've designed the package, effectively communicate the value of it to your employees. Explain how each component works and how it fits into the company's EVP.
7. Regularly review and update your package. It's essential to frequently review and update your package to ensure it remains competitive and relevant. Stay up-to-date on industry trends and changes, and take feedback from employees into account.

Bringing it all together: series conclusion