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5/7/2019
1
Using Total Rewards to
Attract and Retain in a Low
Unemployment MarketPresented by Lockton Companies
Compensation Practice
Lockton Companies |
Definition of Total Rewards
Multigenerational workforce
Total Rewards value analysis
Employee survey
Total Rewards strategy sessions
Brand and culture
Today’s goals and objectives
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Lockton Companies |
Shortage of “skilled workers to fill projected needs
Unable to attract and retain in a low unemployment market
Cost-shifting in company-sponsored health benefit plans
Flat or shrinking salary adjustment pools
Generational workforce diversity—different perceptions and needs
Why a Total Rewards strategy?
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Lockton Companies |
Multigenerational workforce differences
ElementsBaby Boomers Generation X
Generation Y (Millennials)
1946–1964 1965–1980 1981–2000
Values Participation equity Balance between life and work Diversity/morals
Authority Non-authoritarian Dislikes close supervision Respectful of early generations
Characteristics Optimistic Highly motivated Can-do attitude
Work priorities To be a star Fun and flexible Money/career development
Training Skill practice Visional stimulation Mentor programs
Technology Willing to learn Technologically savvy Technologically superior
Career Goal Build a stellar career Build a portable career Build parallel careers
Work/Life Need Assistance Balance Meaningful balance
Compensation Fixed salary/LTI/stock Fixed salary/STI STI/commission
Benefits Security Portability Education
Retirement and Wealth Need
Retirement planning Build wealth Education/portability
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Lockton Companies |
The building blocks of Total Rewards
Compensation
Benefits
❖ Medical
❖ Vision
❖ Dental
❖ HSA, FSA
❖ Basic Life
❖ Supplemental life
❖ Spousal/domestic
partnership
❖ Dependent child(ren) life
❖ Personal accident
❖ STD, LTD (low and high
option)
❖ Voluntary benefits
❖ Tuition reimbursement
❖ 401(k)
❖ Student loan assistance
Workplace Experience
❖ Growth and development
❖ Communication
❖ Recognition
❖ Referral awards
❖ Member discount programs
❖ Flexible schedules/
telecommuting
❖ Base salary
❖ Variable pay
Annual
incentives
❖ Pay for
performance
❖ Sales
compensation
❖ SERP (executive
only)
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Lockton Companies |
Process for creating a Total Rewards Strategy
Employee
survey/pulse on
employee total
rewards
•Conjoint analysis
Total Rewards
market analysis
(published
survey data)
•Compensation, benefits, retirement, PTO
• (Other non cash benefits)
What is “desired”
position in the
market
•At or near the 50th percentile
•Above the 50th percentile for certain
elements
•Key stakeholder meetings
Inventory rewards
not offered •Determine cost impact
Develop Total
Rewards strategy
and communicate
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Total Rewards value analysis
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Lockton Companies |
Total Rewards
value analysis
Identify peer group
Who do you lose to or
draw from?
Scope/demographics
Geography
Lockton Data
Mercer, CompAnalyst,
Willis Towers Watson,Compdata, HRA, ERI
Benchmark
Compensation/benefits/
401(k)/paid time off/other benefits
Total Rewards value analysis
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Lockton Companies |
Lockton conducted a total rewards analysis
of:
Total cash compensation (Base + STI)
Medical, dental, vision, and life insurance
Retirement
Paid time off
Sample Total Rewards summary analysis
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Total Cash
83.52%
Medical (Employee Only)
4.35%
Retirement
3.74%
Life Insurance
0.03%
PTO
8.37%
Market – Total Rewards breakdown
Total Rewards breakdown
[Company]
average
value
Market
average
value
Ratio % -
[Company]
to market
Cash compensation $90,250 $93,346 97.0%
Medical benefits $4,380 $7,180 61.0%
Retirement $6,000 $4,176 144.0%
Paid time off $7,139 $9,352 76.3%
Market value $107,769 $114,054 94.5%
Total Rewards employee survey
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Lockton Companies |
Employee Total Rewards survey process
Determine type of
employee survey
(conjoint or
traditional)
Finalize questions
and develop
online tool
Download and
analyze data
Develop final
report with
recommendation
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Lockton Companies |
Sample overall results summary
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12.1%
3.6%
13.9%
22.4%15.9%
33.2%
26.0%
44.6%
45.8%
39.9%
20.8%
27.7%
21.2%
18.2%
27.5%
21.4%
24.0%
14.0%
10.6%12.1%
12.5%18.7%
6.3%3.0% 4.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Rewards Career Development Communication Culture Employee Engagement
Strongly Agree Agree Neither Agree nor Disagree Disagree Strongly Disagree
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Lockton Companies |
Assesses the importance employees assign to different features of a
total rewards package
Employees are asked to compare two benefits packages and choose the
benefits package they most prefer
Conjoint survey—overview
Total Rewards Package #1 Total Rewards Package #2
Compensation No base pay increase 2% base pay increase
Medical 10% increase in health care premiums 20% increase in health care premiums
Retirement 6% matching contribution 3% matching contribution
Paid time off Vacation buying program Unlimited PTO
Work life Catered lunch 1x per week Paid gym membership
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Lockton Companies |
Understand and cultivate a value proposition that speaks to the unique
preferences and needs of an organization workforce
Identify the benefits employees value most and understand which
trade-offs they are willing to make
Conjoint survey—outcome
21%
14%
12%
9% 9%
7%
0%
5%
10%
15%
20%
25%
Base pay increase 401(k) match
at 3%
Regular healthcare
premiums
Paid time off Bonus Gym wellness
reimbursement
+7%The largest delta between two features is from the
most important to second-most important.
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Lockton Companies |
Conjoint analysis: feature importance sample
21%
14%12%
9% 9%7% 6%
5% 5% 5% 4% 3%
0%
5%
10%
15%
20%
25%
+7%The biggest delta between two features is from most
important to second-most important
Base pay increase is 50% more important than the next
most important feature
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Lockton Companies |
Scores for each level can be used in an Excel-based simulation to model
expected satisfaction of potential total rewards packages
Conjoint survey—outcome
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Total Rewards strategy session
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Lockton Companies |
How would you describe your culture?
Paternalistic
Inclusive
Collaborative
Reinforces the values of the organization
What the company “stands for” is very important to millennials
Where is the organization in their life cycle?
Transformative
Stagnate
High growth
How does your culture come across to the organization?
Positive
Negative
Needs changing/updating/enhancing
Merge/acquisition (unsteady)
Culture
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Lockton Companies |
Do you have a brand that people want to work for?
How would you describe your brand?
Is the brand known? (if not is the culture known?)
How does Glassdoor describe your organization?
What does social media have to say about you?
What is the “image” you are trying to present?
How are you communicating your brand?
Social media
Word of mouth (referrals from employees?)
Are we cultivating the brand and communicating to employees?
Brand
Lockton Companies |
Strengths
• Which reward programs are effective today?
• What should be kept or emulated?
Weaknesses
• Which plans do not work today?
• What and how much needs to change?
• What are the market conditions and are we
competitive?
Opportunities
• How can we best meet the demands of key
stakeholders?
• How competitive are our programs?
• What perception do employees have of Total
Rewards?
Threats
• What conditions threatened business success?
• How do existing plans fail to respond to external
conditions?
• How do existing plans fail to respond to internal
conditions within the organization?
SWOT analysis
Sample SWOT analysis for Total Rewards strategy
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Lockton Companies |
The employee life cycle
Recruit
Talent acquisition
Compensation
Benefits
Retirement
Work/life balance
Onboard
Job orientation and
training modules
Online benefits
enrollment
Develop
Performance
management
Learning management
Career development
Retain
Employee engagement
Succession planning
Work/life programs
Other non-cash benefits
Off board
Exit interview and feedback
Initiation of retirement plan
benefits and final pay
Lockton Companies |
Market Study
Business Needs
Sample Total Rewards strategy
TOTAL
REWARDS
PROGRAM
Fixed payPerformance
management
Health and
welfare
Savings/
retirement
Time offLearning and
developmentWorklife
Variable
pay
Employee
needs
Business
needs
Employee
Needs
Total Rewards
Programs
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RISK MANAGEMENT • EMPLOYEE BENEFITS • RETIREMENT SERVICES
Our Mission | To be the worldwide value and service leader in insurance brokerage,
risk management, employee benefits and retirement services
Our Goal | To be the best place to do business and to work
© 2019 Lockton, Inc. All rights reserved.
LOCKTON.COM