Top Four Total Rewards Trends in 2021

Have you reviewed your total rewards package lately? Over time, your organization’s people strategy and current and future workforce have likely evolved. You might still be investing in benefits and programs that aren’t valuable to your employees. Given their ever-changing needs and expectations – especially in 2020 – you might not have the right total rewards offerings for your employees and your organization.

Where should you focus in 2021? Here are the top four total rewards trends to consider for your organization.


The pandemic has made flexible work arrangements more realistic quicker than most of us ever dreamed possible. In fact, almost 70% of full-time workers in the US are working from home during COVID-19, and 80% expect to work from home at least 3x per week after COVID-19. But, as we struggle to catch up with the rapid pace of change, you may be asking, “How do I pay a distributed workforce? How should I approach my employee compensation strategy?”

Take a close look at your compensation philosophy and practices around geographic and remote work pay, and create a flexible, future-focused strategy. Here are three key approaches to determining pay for your distributed workforce:

  • By employer location or national rate – employees are paid on a single pay structure regardless of where they live.
  • By employee location – employees are paid based on where they live.
  • Remote work differential – employees are paid using a differential above your “home office” rate for working remotely by choice. For example, if you would normally pay $45,000 for a marketing coordinator, you may add a 5% remote work differential to increase their pay to $47,250. This accounts for the office costs (such as desk space, snacks, printing costs) that you are saving when they chose to work remotely.

Mental Well-Being Focus

Employers are strategically moving away from using well-being as a means to reduce healthcare costs and expanding to mental well-being. With one in every five US adults having a mental health disorder, mental health is an issue we cannot ignore.

At First Person, we partner with Springbuk, a national leader in health intelligence, and our own proprietary analytics tools to gain insight into mental health prevalence and cost. Our Senior Director of Health Strategy, Dr. Ryan Bojrab highlighted some key data points:

  • 69% of members with a mental health condition also have a chronic disease.
  • Mental health diagnosis groups are more frequently showing up on employers’ top ten spends.
  • Members with a mental health condition are also twice as likely to classify as a high-cost claimant (>$50,000).
  • Average monthly cost for members with a mental health condition is more than double members’ without a mental health condition ($9,921 vs. $4,958).

Now is the time to assess your current resources, select any additional programs for your benefits package, and ensure your employees understand what benefits are available and how to use them. Consider these steps as you start or further develop your mental well-being strategy:

  • Start with meaningful data.
  • Get clear on your challenges.
  • Identify your well-being strategy; assess and select resources and create organizational support.
  • Educate and engage employees.

Work Environment and Resources

For many organizations, work environment is no longer defined as a physical location. Employers – maybe even you – have recognized they need to increase communication and find ways for employees to connect in this new world. With the likelihood of returning to a traditional office environment being slim to none, how can you redesign your space and practices to support collaboration and connection?

This is the main reason why people will likely be going to their workplace in the future. At the same time, it’s important to be innovative in your approach to virtual gatherings and connections among teams – to combat the continued and growing problems of social isolation and loneliness. At First Person, we’ve changed the way we do things, such as having weekly all-team meetings and using Slack to improve collaboration and communication.

Whether your employees will be working completely remote, sometimes remote or somewhere in between, make sure you address these areas:

  • Leadership visibility
  • Messaging
  • Internal communication tools and channels
  • Evolving the role of the frontline and mid-level managers
  • Establishing new norms

Diversity, Equity and Inclusion

The long overdue awakening of our country to racial injustice has brought forward a new focus on diversity, equity and inclusion in all areas of business. “As we think about the future of organizations, 80% of employees said an employer’s DE&I policy is an important factor in deciding to work for them.”

At RESOLVE Increments last October, VP of Diversity and Inclusion at Health and Hospital Corp Angela Smith Jones imparted on us her advice for creating a more equitable and inclusive workplace.

  1. Begin by starting the conversation.
  2. You can’t win with just “point guards.”
  3. Creating a diverse team takes leadership buy-in.
  4. Lead with your heart. Learn about their journey.
  5. Attracting diverse talent means looking in new places and describing opportunities in new ways.
  6. Get comfortable being uncomfortable.

If you are one of the many employers who doesn’t have a diversity, equity and inclusion strategy yet or are trying to figure out how to get started, now is the time to partner with those in your community who are making a difference in this area.

These four growing trends in total rewards all share one thing in common: It’s important to have leadership and manager support to truly see success. You also must communicate early and often with employees in all of these areas so they understand the true value of your offerings and have a positive and engaging employee experience. With the right pieces of your total rewards package, you can attract and retain high performing talent to drive your organization’s performance to the next level.

Questions? Want to dig in further? I’d love to chat with you. Feel free to reach out to me via email or LinkedIn. You can also drop us a line or tweet at us!

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