Unleashing the power of total rewards to improve engagement, retention and trust 

Work takes a different shape today than ever before. The pandemic drastically shifted what employees want and need from their employers. Financial stressors have skyrocketed amidst rising living costs and are now the top concern of employees. And well-being continues to be a key priority, with younger workers especially concerned about mental health.

Employees’ trust in employers has declined significantly since a high in early 2020, and employers are looking for ways to rebuild trust. Engaging employees around a Total Rewards package that matters to them is more important than ever; making them feel seen and heard will help increase trust, engagement and retention.

To understand how these changes are impacting organizations, Mercer hosted a discussion with 3 Total Rewards Leaders at 3 organizations: Mike Galat, Vice President of Employee Services at Big Y Supermarkets; Fanny Sheumaker, Senior Vice President of Total Rewards at Caliber Collision; and Devann Steele, Vice President of Enterprise Compensation at Humana. While each of these organizations are at different stages of building their Total Rewards strategies, four key themes emerged in how they have made strides to enhance their employee value proposition:

1. Lead with Listening
2. Get to the heart of the issue
3. Identify where you want to shine
4. Engage for impact

Employers of any size and any stage in the Total Rewards journey can learn from Galat, Sheumaker and Steele’s stories. 

To design an employee value proposition (EVP) that people care about, first start by listening to your employees to understand their unique needs and preferences. Employees’ expectations have shifted, so leaders can’t assume that what matters to people today is the same as a few years ago. On the whole, American employees’ top three unmet needs are covering monthly expenses, being able to retire and work-life balance, but all organizations and employee populations are unique. All three organizations started their Total Rewards journeys with the voice of the employee.

Big Y leadership worked with Mercer to conduct an Unmet Needs Survey, uncovering that their employees were most concerned with financial wellbeing, mental health and work-life balance. When they drilled down even further, they found key areas of opportunity in employee healthcare, specifically diabetes and musculoskeletal-related health issues.

Caliber leadership conducted a Conjoint survey and used benchmark data to determine the areas that matter most to employees. Even when cutting the data by various demographic groups, the greatest areas of concern were consistent: healthcare affordability, retirement and paid time off.

Humana leadership conducted a robust employee survey that received over 30,000 responses. The survey revealed the need for a broad solution that would address the top unmet needs that were consistent across various parts of the business, as well as more targeted solutions that would support various diverse employee groups.

For Total Rewards changes to lead to successful outcomes, it’s critical to solve the right problem. Often, organizations know things aren’t working but aren’t sure where to start. Discovering what’s truly driving attraction, retention or engagement issues will underpin sustainable Total Rewards practices.

The Unmet Needs research revealed that the most prominent employee pain points at both Caliber and Big Y were around affordability, primarily of healthcare and monthly expenses.

Based on this feedback, Caliber developed a multi-year roadmap to lower the costs of medical care for employees, among other priorities. Once Caliber learned that employees were deferring care due to costs and leaving healthcare conditions untreated, they implemented a new, transparent medical plan. "Members can ‘shop’ for affordable care in an easy-to-use app that gives a range of co-pays and steers them to high-quality providers,” Sheumaker says.

Once Big Y understood that day-to-day finances were a top employee concern, they added a financial coaching vendor to existing financial wellness resources. In less than a year, the 76 employees that engaged with the program have saved an average of over $8,000 per household.

Getting to the heart of the issue was more complex for Humana. Leadership needed to determine where the Total Rewards portfolio should be the same and where it should be different across various lines of business, to improve satisfaction for various groups of employees. They ended up coming up with a list of offerings to provide every employee, such as bereavement leave, recognition/service awards, and pay transparency. Beyond the basics, they vary their offerings based on what will attract and retain employees with very different priorities, such as actuaries and home healthcare workers.

It’s not economically feasible for organizations to provide premium, innovative rewards across all segments of the organization. Instead, link your Total Rewards and talent strategies together to identify specific areas where you want to differentiate yourself.

Humana invested in education and communication to advance pay transparency across all associates along with targeted differentiation in rewards for certain populations. “The changes have boosted trust among employees and allowed for more transparent discussions to occur with their managers,” Steele says. “More transparency has also led HR to be able to recruit a higher caliber of talent.” In addition, when Humana began to see savings in one area of Rewards, they stayed cost-neutral by reinvesting those savings into another area that would meet employees’ unmet needs. To focus on affordability for large hourly workforces, Caliber and Big Y both used creative strategies to reduce costs for employees by offsetting those costs in other areas.

Caliber invested more into company contributions to healthcare premiums alongside the new care provider marketplace app. The company ultimately benefits from these investments because employees are receiving care from a provider who both costs less and has proven quality outcomes, keeping the workforce healthy and financially stable and costing the employer less in premiums overall.

Beyond financial coaching, Big Y now offers a variety of solutions based on the key unmet needs that were consistent across their various populations: diabetes, cancer care and musculoskeletal care and an employee assistance program (EAP) to assist with mental health concerns, among others. “We are committed to constantly adapting the strategy based on the changing needs of the employees,” Galat says.

Benefits add value to your organization only if employees know what’s available and where they can go for support. Your HR communications and technologies should be as intuitive as the consumer experiences people have come to expect, such as ordering batteries on Amazon, hailing an Uber from the airport or watching Netflix after a long day at work.

Communication activation was critical for all three organizations. Especially as they made transformational changes to their Total Rewards offerings, they needed to let employees know about the resources newly available to them.

Big Y identified early on that employee engagement and satisfaction increased while interacting on a human-to-human level.  To address this need, Big Y embedded HR generalists, known as Employee Service Representatives (ESR), within each store to act as a front-line point of contact for their front-line employees.  These employees typically do not have a company email address or phone so by having an ESR for onsite support provides employees with direct access to education and personalized support for their individual needs. In addition to personalized interactions at the store level, Big Y identified the need for a higher touch concierge service for their employees as they engage in their healthcare and to further guide employees through the intricacies of the healthcare system.  After very thoughtful consideration, Big Y offers a high touch advocacy service, Quantum, to all employees and their families enrolled in the medical plan, to help navigate their healthcare journey. With this two-prong approach, Big Y employees are engaged at a higher level in their healthcare, are better equipped to understand the value of their benefits and how Big Y invests in their health and wellbeing.

Caliber has similar challenges with communication to employees, so they used the TVs in all of their centers and a text campaign to help employees and their families understand the new resources available to them.

While the change at Humana is in its early days and the communication rollout is just beginning, the changes have received positive feedback from both employees and HR. Employees have recognized that the flexibility within Total Rewards caters to groups with different needs, meaning their employer is listening to them and responding to their feedback.

Big Y is the farthest along the Total Rewards transformation journey, with Humana at a middle point and Caliber at the start — but all have seen the positive impact of the changes they’ve made so far. No matter where you are in your Total Rewards journey, listening to employees and acting with empathy, targeting rewards to specific employee needs and communicating and educating about the rewards on offer will help you succeed in your goals to engage and retain top employees.

Mercer can help you discover what keeps your employees up at night and design a Total Rewards program that shows you care.

We believe success lies in co-creating a compelling and effective Total Rewards strategy. We work with you to design an end-to-end Total Rewards strategy, from vision and opportunities, to strategy, to the roadmap for change. Our cross-functional team brings expertise across the entire Total Rewards portfolio, as well as other key areas such as employee research, workforce analytics and technology and transformation.