A total rewards package is more than just a paycheck or health insurance—it’s the full range of compensation, benefits, and support an employer provides to attract, engage, and retain talent. From perks and performance incentives to programs that promote well-being, a thoughtful total rewards strategy recognizes that employees are motivated by more than salary alone. It’s about creating a workplace where people feel valued, supported, and empowered to thrive.
This guide explains what total rewards are in HR and provides a roadmap for building a strategy that aligns with your workforce’s needs and drives long-term success.
What is a total rewards strategy?
A total rewards strategy goes beyond traditional salaries and standard benefits by taking a more holistic approach to what employees value. Rather than focusing solely on monetary compensation, employers consider the full spectrum of employee needs – combining essentials like base pay and health insurance with
additional benefits such as flexible work arrangements, employee stock options, or professional development. Some companies also get creative by offering perks such as catered lunches, paid volunteer days, or wellness programs to enhance the overall employee experience.
While competitive salaries remain important, today’s employees are looking for more. They want meaningful career development opportunities, performance incentives, and recognition that reflects their contributions. These elements—alongside thoughtful perks—help create a workplace where people feel genuinely valued and supported.
Total rewards packages play a critical role in driving employee retention, satisfaction, and performance. Research consistently finds that pay and benefits are the
top reasons employees look for new work. And when employees feel valued and supported by their compensation and benefits packages, they’re more engaged, collaborative, and equipped to approach challenges with creativity and confidence.
Benefits of implementing a total rewards strategy
A carefully tailored total rewards strategy pays for itself by helping an employer build a strong, productive workforce. For example, a study found that
childcare benefits deliver up to 425% ROI for employers.
A comprehensive total rewards program promotes workplace success in the following areas.
Attracting top talent
To stand out in today’s competitive job market, companies need total rewards programs that reflect what employees truly value—not just what’s been traditionally offered. That means going beyond outdated assumptions and staying attuned to evolving expectations.
For example, Randstad’s 2025 Workmonitor report found that
83% of employees see work-life balance as their most important motivator, above pay. This highlights the need for total rewards programs that align with what candidates are really looking for.
Retaining current employees
Employees are more likely to stay with an organization when they feel fairly compensated – both at work and beyond. By offering a thoughtful mix of competitive pay, paid time off, professional development, and other total rewards benefits, employers create an environment that helps foster a sense of loyalty and long-term commitment. When employees see their needs being met, they’re more likely to see a future with the company.
Driving engagement
When employees understand how their work connects to rewards, they become more invested in company goals. Performance-based incentives provide one example, but a robust total rewards strategy can also leverage recognition programs to help employees see the direct impact of their contributions.
Increasing productivity
Employees are more focused and productive when they aren’t worried about basic needs. Benefits that support their mental, physical, and financial wellbeing — like healthcare, wellness programs, and financial programs — play a key role in helping employees stay present and engaged at work.
While traditional rewards like salary and healthcare remain important, employees also want support in other areas of their lives — especially when it comes to financial well-being. That’s where EarnIn can help. EarnIn offers Earned Wage Access, allowing employees to access up to $150 per day, with a max of $750 per pay period — with same-day transfers starting at $2.99 per transfer. Combined with tools like Tip Yourself to build savings habits and Balance Shield to help protect against overdraft fees, EarnIn gives employees greater financial flexibility and peace of mind – leading to less distraction and better job performance.
5 elements of a total rewards strategy
Successful total rewards strategies combine multiple elements to support employees throughout their careers. Here’s what employers should include:
Payment. Financial compensation forms the foundation of any total rewards program. This includes salaries and commissions that reward excellent work. Some employers also offer stock options or profit-sharing plans to give employees a stake in the company’s success.
Benefits. Benefits like health insurance, retirement plans, and paid time off are now baseline expectations for most employees. Some employers expand traditional benefits to include disability coverage, life insurance, or flexible spending accounts for healthcare and dependent care.
Well-being. Employee well-being initiatives foster work-life balance and reduce stress. Some companies offer flexible work schedules or remote work options, while forward-thinking employers take it a step further by providing wellness programs, mental health resources, or employee assistance programs to support their teams.
Recognition. Recognition programs acknowledge employee achievements with rewards beyond standard compensation. This includes one-time bonuses for exceptional projects, service awards for tenure milestones, and peer recognition systems that build team culture. Regular feedback and performance reviews show employees that their work matters.
Career development. Professional growth opportunities keep employees engaged long-term. Employers may provide training programs, reimbursement for certifications and higher education, or mentorship from senior employees. Clear career paths and internal promotion opportunities show employees they can advance without switching companies. Research shows that internally promoted managers are
47% less likely to quit compared to external hires.
How to create a total rewards strategy
An effective total rewards program requires careful planning and systematic implementation. HR teams must consider how to develop a strategy that serves both employees and employers. Here are the essential steps:
1. Survey employees about needs and preferences
Gather direct feedback from employees about what matters most to them. Anonymous surveys identify which benefits employees value and which they rarely use. Ask specific questions about work-life balance, professional development needs, and preferred types of recognition to learn what employees want.
2. Review current compensation and benefits
Analyze existing policies for base pay, benefits, and incentives. Look for gaps in coverage where current offerings fall short of employee needs.
When reviewing internal policies, take the time to compare total compensation packages, including salaries and perks, against industry standards to ensure competitiveness.
3. Match rewards to business objectives
Align the pay, benefits, and incentives in your total rewards program with company goals and culture. If innovation is the organization’s most treasured value, emphasize rewards for new ideas. If customer service drives success, create recognition programs that highlight exceptional client support.
4. Create a balanced program
Design a total rewards strategy that addresses employee needs across career stages and life situations. Include a mix of immediate rewards like competitive compensation and long-term benefits like retirement plans or employee stock options. Consider offering individual and team-based incentives to encourage collaboration while recognizing personal achievement.
5. Track and update your strategy
Monitor how employees use different benefits and gather regular feedback about pay and rewards programs. Track relevant metrics, such as retention rates and employee satisfaction scores. Then, use this data to refine your offerings and verify that the program continuously meets employee needs as workplace expectations evolve.
In addition, consider external factors, like new laws and evolving industry trends, to inform your compensation strategy.
Tips to implement a total rewards strategy
Here’s how to make sure your total rewards program delivers maximum value to employees, fostering retention and motivation:
Communicate clearly. Share detailed information about pay schedules and available benefits across multiple channels to ensure employees understand what’s available and how to leverage each offering. Hold information sessions, provide written documentation, and create accessible digital resources.
Use HR technology. Modern software solutions can
help HR teams track benefit usage, automate reward distribution, and gather employee feedback. They can also simplify benefits enrollment and help employees access their total rewards information anytime.
Be transparent about value. Avoid overstating the estimated worth of nonmonetary benefits when valuing
total compensation. Use realistic figures based on actual usage patterns to calculate variable benefits, such as unlimited PTO or flexible scheduling. This encourages trust and helps employees make informed decisions.
Personalize rewards. Employees value different benefits depending on their life circumstances. New graduates might prioritize student loan assistance, whereas parents may seek flexible scheduling. Create options so employees can choose the most valuable benefits for their situation.
Empower your team with financial wellness benefits with EarnIn
A well-rounded total rewards strategy does more than increase productivity — it builds loyalty, engagement, and long-term business success. As financial well-being becomes an increasingly essential part of the employee experience, it’s important to offer benefits that promote security, reduce stress, and support overall well-being.
Elevate your total rewards strategy with EarnIn. Offered at no cost to employers with no payroll or time and attendance integration required, our solution gives employees flexible access to their earnings. With Earned Wage Access, employees can access up to $150 per day, with a max of $750 per pay period, and get their money the same day they work starting at just $2.99 per transfer. Additional tools like Balance Shield and Credit Monitoring help employees avoid the surprise of low bank balances and provide insights into their credit score, helping reduce your team’s financial stress and supporting everyday financial wellness.
Try EarnIn today to enhance your total rewards package and create a happier, more engaged workplace.
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.
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