Strategy Matters: Benefits through the Total Rewards Lens

At our firm, we don’t have a mission statement. Instead, we have a Purpose: “to provide the strategic employee benefits advice that every business deserves.” For most businesses, employee benefits are the second-largest line item on the P&L. Yet it seems to me that a great many businesses have settled for brokers that are unwilling or unable to provide strategic advice. This makes no sense to me – even smaller line items on the P&L come under scrutiny by a cadre of expensive advisors. But employee benefits? Have Bob from Accounting’s uncle come in and show his spreadsheets. Our goal is to “go beyond the spreadsheet” and provide meaningful guidance. To that end, periodically in the blog I’d like to spend time talking about a benefits strategy topic.

For me it all starts with the Total Rewards framework. It’s not an industry secret, but it is too rarely used (or understood?) by brokers, in my experience. The concept is fairly simple: employers should look holistically at the deal they have with employees, instead of putting elements like compensation and benefits in silos. Every (successful) business is endowed with certain strengths. Some can pay more than their competition. Some can offer better benefits. Some can offer a fun, engaging work environment. The really successful companies can do more than one of these things well. Total Rewards challenges the employer to think about where their strengths lie, and how to capitalize on those strengths to recruit and retain the human capital their business needs to thrive.

In addition to compensation, benefits, and work environment, the other two areas usually considered part of the Total Rewards framework are professional development and performance & recognition. When we sit down to talk about benefits strategy with a client, we start by talking about each of these five areas to understand where the client has strengths. Then we test whether the strength is real or perceived. From there we talk about how the strengths are being projected to current and prospective employees. This is the first step in getting real about having an employee benefits strategy.

Once we know where employee benefits fit within the puzzle, we can start to design programs that match the employer’s intent. We can tease out strategies and plan designs that are uniquely tailored to the business’s broader objectives. Ask yourself: why would I skip all this stuff and just look at quotes on a spreadsheet?

Want to learn about what types of programs fall within the five areas of Total Rewards? Don’t have an advisor that knows how to work with you strategically? Drop us a line at bayoubenefits@gmail.com