The importance of employee preference analytics in Total Reward

In today's dynamic and competitive landscape, understanding and integrating employee preferences into Total Reward strategies is not just a strategic advantage, but a necessity to attract, motivate and engage the workforce.

Employees are looking for more personalised and meaningful rewards that meet their individual needs, values, and career aspirations. Recent insights from PwC’s Global Workforce ESG Preferences Study highlight the significance of tailoring Total Reward offerings to enhance both employee satisfaction and organisational success.

The changing workforce dynamics

As people leaders, we are acutely aware that the workforce of today is diverse, dynamic, and driven by values that go beyond just financial compensation (although this doesn’t discount the importance of getting pay right so it is fair and equitable). Research shows that employees are increasingly prioritising aspects such as work-life balance, career development opportunities, and workplace culture, leading to a more sustainable workforce.

Workforce sustainability is about creating an environment where employees feel valued, supported, and motivated to contribute their best. Organisations prioritising employee preferences in their Total Reward strategies are better positioned to build a resilient and sustainable workforce. This approach not only enhances employee wellbeing but drives organisational performance and innovation.

Employee preference analytics: the game changer

Harnessing the power of employee preference analytics provides a competitive edge when crafting effective Total Reward strategies.

And what does employee preference analytics mean? It refers to the systematic collection, analysis, and interpretation of data regarding employees' preferences, needs, and values related to various aspects of their work and benefits.

By leveraging this data, organisations can gain deep insights into what their workforce truly values, enabling them to design tailored reward packages that meet the needs of the employee–which in turn drives satisfaction, motivation, engagement, and retention.

For instance, PwC’s ESG Preference Study reveals that flexible working arrangements, approach to employee engagement and satisfaction, opportunities for skills development and management of their company's reputation are highly valued by today’s workforce. By leveraging such data, reward packages can be tailored to resonate with employees.

This data-driven approach involves using surveys, real-time feedback tools, and other data collection methods to gather insights into what employees prioritise in their work environment, compensation, benefits, career development opportunities, and overall workplace experience, leading to:

• Tailored reward packages: PwC’s research shows that companies that offer tailored rewards based on employee preferences can see measurable improvements in engagement, satisfaction, and retention.
• Enhanced employee retention: When employees feel that their preferences and needs are being met, they are more likely to stay with the organisation (26% more likely to stay if improvements are made to the Total Reward offering).
• Increased productivity and performance: Employees who are satisfied with their rewards and benefits are generally more motivated and productive. Research indicates that investing in employee Total Reward and Wellness, which includes understanding and catering to their preferences, can lead to significant company productivity and performance gains (3x more likely to engage and retain workers, 10x more likely to have lower rates of absenteeism, 2x more likely to exceed financial targets).
• Better decision-making: Employee preference analytics provide people and organisational leaders with evidence-based insights that can inform strategic decisions. This data-driven approach ensures that reward strategies are aligned with actual employee needs rather than assumptions or outdated practices.
• Adaptability to changing preferences: Importantly, employee preferences can change over time due to a range of factors including economic conditions, generational shifts, stage of life and personal circumstances. Continuous monitoring and analysis of these preferences allow organisations to adapt their reward approach accordingly, ensuring they remain relevant and valued.
• Competitive advantage: By offering rewards and benefits that are closely aligned with what employees want, companies can attract and retain the best talent, fostering a more engaged and productive workforce.

What can companies do?

Importantly, not everything needs to change! Typically, 80% of a reward offering in organisations doesn’t need changing–only the way in which it is communicated and presented to the workforce. It is usually the 20% that, once refined/updated, creates a point of difference and attractor for organisations. The challenge is understanding which 20% needs attention. To be more proactive in understanding what that 20% looks like, organisations can:

• Listen to employees: regularly gather feedback on employee preferences and adapt your Total Reward offering accordingly, ensuring your strategy remains relevant and aligned with evolving workforce needs.
• Leverage advanced analytics tools: utilise predictive analytics and data visualisation tools to analyse data and identify trends and patterns in employee preferences. Cross-reference preference data with other relevant datasets, such as demographics, job roles, and career development goals, to gain deeper insights.
• Customise reward offerings: develop flexible reward packages that allow employees the freedom to choose the benefits and incentives that matter most to them.
• Communicate effectively: clearly communicate the available reward options and how employees can customise their packages–with guidance and support to help employees make informed decisions about their reward.
• Monitor and evolve: continuously monitor the effectiveness of the reward packages. Be agile and ready to adapt the reward strategy based on changing employee preferences and external factors.

Integrating employee preferences into Total Reward strategies is not just a trend; it is a strategic imperative. Let's embrace the power of employee preferences and transform Total Reward strategies to build a brighter, more sustainable future for the workforce.

If you would like to discuss how to better understand preferences to design more effective and valued Total Reward strategies, please contact us.