As an HR professional, there are few things more frustrating than watching a great employee you worked hard to recruit walk out the door. You thought they were happy. They had a competitive salary, good healthcare... What went wrong?
The truth is, in today's job market, a good paycheck is just the price of admission. It’s no longer enough to make top talent stay. Employees are looking for more. They want to feel valued, supported, and invested in. This is where a total rewards strategy becomes your most powerful tool.
So, what is a total rewards strategy? It’s the complete package of compensation, benefits, and meaningful experiences a company provides to its employees. It’s the answer to the question, "Why should I work here?" And when done right, it’s one of the most effective employee retention strategies you can deploy.
The Five Pillars of a Total Rewards Strategy
A total rewards strategy isn't just a random assortment of perks. It's a deliberate, holistic system designed to create a positive and enjoyable employee experience. Let's explore the five key pillars of a modern total rewards strategy and how you can build one that makes your best people want to stay. Think of these as interconnected pillars holding up your entire employee value proposition.
Pillar 1: Compensation
This is the most straightforward pillar: base salary, bonuses, incentives, stock options. This pillar can also be viewed as the foundation; if compensation is cracked, the whole system is unstable. If employees feel underpaid or that your pay practices are unfair, no amount of free snacks or wellness apps will keep them. They'll feel undervalued and look for an employer who pays them what they're worth.
How to get it right:
Be Competitive: Regularly benchmark your salaries against industry and regional data to ensure you’re paying fairly.
Be Transparent: You don't have to publish everyone's salary, but you should have clear compensation bands for roles. This transparency builds trust and shows employees a clear path for financial growth.
Be Equitable: Conduct regular pay equity audits to ensure there are no pay gaps based on gender, race, or other factors. This isn't just a legal requirement; it's a moral one that signals your company's values.
Pillar 2: Benefits
This pillar includes all non-cash compensation. The basics are health, dental, and vision insurance, plus retirement plans like a 401(k). According to a 2023 SHRM report, 60% of employees rate benefits as a very important contributor to their job satisfaction. Benefits show you care about your team as whole people, not just employees. A robust benefits package shows you’re invested in your team's physical, mental, and financial health, not just their productivity.
How to get it right:
Go Beyond the Basics: Standard health insurance is expected. To stand out, consider adding comprehensive mental health support, fertility benefits, caregiver support, and financial wellness tools.
Offer Flexibility: One size does not fit all. This is where offerings like Lifestyle Spending Accounts (LSAs) shine. They allow employees to use funds for what they value, whether it's a gym membership, a meditation app, or pet insurance.
Make Them Usable: This is a crucial, often-overlooked step. Having great benefits is useless if employees don't understand them or find them hard to use. This is a huge focus for us at Bennie. Our platform, coupled with our ‘Ask Bennie’ advocacy service, helps employees actually navigate and use their benefits, turning a confusing line item into real, tangible value.
Pillar 3: Work-Life Balance
This pillar is about respecting an employee's time and life outside of work. It includes paid time off (PTO), holiday policies, flexible scheduling, remote or hybrid work options, and paid parental leave. Burnout is a primary driver of turnover, so today’s talent demands flexibility. A rigid 9-to-5 office culture no longer meets the needs of today's workforce. In fact, FlexJobs research shows that 63% of workers would look for a new job if they were required to return to the office full-time. A strong work-life balance strategy shows you trust your employees to get their work done without sacrificing their well-being.
How to get it right:
Embrace True Flexibility: This could mean core collaboration hours with a flexible start/end time, a hybrid schedule, or fully remote options.
Encourage PTO: Don't just offer vacation days. You must create a culture where people (including managers) actually take them without guilt.
Support Families: Policies like paid parental leave for all new parents and flexible "return-to-work" programs show you’re committed to employees for the long haul, through all of life's stages.
Pillar 4: Performance and Recognition
This pillar focuses on how employees are evaluated and, more importantly, appreciated. It includes formal performance reviews, clear goals, and informal recognition programs. Everyone wants to know they’re doing a good job. Employees who feel their work is invisible will eventually look for a place where they can be seen. Gallup research consistently shows that engaged employees who feel connected to and recognized by their team are far more likely to stay. Businesses with highly engaged teams see significantly less turnover.
How to get it right:
Rethink the Annual Review: Move toward more frequent, informal check-ins and feedback sessions. Learn practical ways to implement a culture of continuous feedback.
Make Recognition Specific and Timely: Don't wait for a formal review. Encourage peer-to-peer recognition programs (platforms like Bonusly or simple Slack channels work well). A "thank you" is most powerful when it's tied to a specific action.
Total rewards examples for recognition: Spot bonuses for project milestones, extra PTO days, or simply a heartfelt, public shout-out in a company meeting.
Pillar 5: Development and Career Opportunities
This pillar is all about an employee's future. It includes training programs, tuition reimbursement, mentorship opportunities, and clear paths for internal promotion. The "dead-end job" is a retention killer. Ambitious employees won't stay if they can't see a future with you. By investing in their growth, you send a clear message: "We believe in you, and we want you to build your career here." According to LinkedIn’s Workplace Learning Report, 94% of employees said they would stay at a company longer if it invested in their learning and development.
How to get it right:
Create Clear Career Paths: Work with managers to define what "growth" looks like for each role. It might not always be a linear promotion; it could be a lateral move to learn a new skill.
Fund Their Growth: Offer a professional development stipend, tuition reimbursement, or access to online learning platforms.
Formalize Mentorship: Connecting junior employees with senior leaders is a low-cost, high-impact way to foster engagement and transfer internal knowledge.
Why Total Rewards is a Retention Game-Changer
When you put these five pillars together, you move from a simple, transactional relationship (a paycheck for work) to a holistic, relational one. A total rewards strategy is the difference between an employee who is simply doing a job and one who is invested in the company.
High turnover isn't just a hassle; it’s incredibly expensive. Factoring in recruitment, training, and lost productivity, the cost of replacing an employee can range from one-half to two times their annual salary. This is where your benefits and compensation strategy delivers a tangible business outcome.
An effective total rewards strategy directly tackles the root causes of turnover:
Pillar 1 prevents exits over pay.
Pillar 2 prevents exits over lack of support or high-stress life events.
Pillar 3 prevents exits over burnout.
Pillar 4 prevents exits over feeling unappreciated.
Pillar 5 prevents exits over a lack of future opportunity.
By strategically investing in all five areas, you create a powerful "retention bubble" around your top talent. Research from WorldatWork shows that organizations can increase retention by nearly 30% over six months through well-designed total rewards approaches. That's a massive, measurable impact on your bottom line.
Building Your Own Total Rewards Strategy
Okay, the "what" and "why" are clear. But how do you build this? It's not as simple as just buying a new software platform. It’s a strategic process, but here are initial steps you and your organization can take to revamp your offering.
Step 1: Assess Your Company’s Unique Needs
You cannot build a compelling strategy in a vacuum. The worst thing you can do is spend a lot of money on a "hot" new benefit that nobody on your team actually wants.
What to do: Use the tools you have. Send out anonymous employee engagement surveys. Conduct "stay interviews" to ask your top performers what they value most. Organize focus groups.
Look at your data: What's your turnover data telling you? Are people leaving from one specific department? Are your exit interviews all mentioning the same thing? You can also look at your benefits data. Are there programs with very low utilization? This is a great area where Bennie can provide insights, helping you see what benefits employees are actually using and what they’re asking our advocates about.
Step 2: Align with Your Company Culture & Goals
Your total rewards strategy should be a direct reflection of your company's mission and culture. A one-size-fits-all approach borrowed from a competitor won't feel authentic.
What to do: Ask, "What kind of company are we?"
Example: A high-growth tech startup might focus heavily on Compensation (equity) and Development (fast-paced growth).
Example: A non-profit or mission-driven company might lean into Work-Life Balance (great PTO, flexible hours) and Recognition (celebrating mission-driven wins).
Get leadership buy-in: Connect your strategy to the larger business goals. Frame it as a retention strategy and a talent acquisition tool, not just an HR expense.
Step 3: Communicate, Communicate, Communicate
This is the step where most strategies fail. You can build the most incredible, comprehensive, and expensive total rewards program in the world, but if your employees don't know about it, understand it, or value it, it has zero impact.
What to do: Stop thinking about communication as a once-a-year event during open enrollment.
Show them the money: Use "Total Rewards Statements" that go beyond the paycheck. Show the dollar value of their health insurance premiums, 401(k) match, and development stipend. This frames their "compensation" in a much broader, more powerful light.
Make it accessible: This is the core of what Bennie was built to do. Your benefits and rewards shouldn't be hidden in a dense, 80-page PDF. The Bennie app puts everything in one simple, easy-to-use place. When an employee can open an app, see their benefits, and chat with an ‘Ask Bennie’ advocate to get a question answered in minutes, you've transformed that benefit from a confusing policy into a valued, real-time experience.
The Future is Holistic
A paycheck is a transaction. A total rewards strategy is a relationship. It’s the single most powerful statement your company can make about how much it values its people.
By thoughtfully designing a strategy that covers compensation, benefits, work-life balance, recognition, and development, you’re not just checking boxes. You’re building a workplace where people feel secure, supported, appreciated, and excited about their future. And in the long run, that’s the only retention strategy that truly works.
Building a competitive benefits and compensation strategy is complex, but you don't have to do it alone. Bennie helps companies modernize their benefits and provides employees with a world-class experience to understand and use them. From expert broker consulting to an easy-to-use app and year-round advocacy, we help you make your total rewards strategy a reality.
Learn more about how Bennie can help you build a benefits package that drives retention.
