Perks have lost their luster? No kidding!

There’s a better way to shine as an employer


Posted by Melanie Langsett, Garry Spinks, and Naomi Bradley on January 9, 2019.

We’ve seen a flurry of articles recently describing why perks are becoming passé. That’s not to say workers no longer value compensation, benefits, and the extra things that employers offer and do for their workforce; it’s just that often the rewards being offered aren’t meaningful to workers and organizations aren’t seeing enough return on their investment—no boost in worker engagement or retention, nor upticks in their employment brand. We couldn’t agree more. Making rewards more, well, rewarding for the workforce and organizations means evolving beyond the too-common practice of throwing perks at the wall and hoping they stick.

Almost nothing about work and workplaces is the same as it used to be. People are looking for different things from their jobs beyond a paycheck, a retirement plan, and insurance. The workforce and its needs are more diverse. Not everyone is, or wants to be, a full-time employee—the list of differences between then and now is long. The old standard “proof” of competitiveness—benchmarking compensation and benefits by industry and geography—holds little weight in an era where workers can easily search employer reviews and ratings and decide for themselves the relative value of an organization’s offerings. Not to mention that formal benchmark data quickly becomes outdated, which essentially means organizations are looking at where someone else has been to determine where they should go next. Who can drive while looking in the rearview mirror?

Many companies have introduced novel types of rewards to try to entice workers and differentiate themselves (Free food, anyone? Table tennis? Craft beer in the breakroom?). But novelty alone isn’t much of a business case, as first-mover advantage can be measured in shorter and shorter periods of time when organizations respond, as many do, by quickly offering whatever perk someone else just introduced.

Choose a new path forward: Shift from rewards to relationships
We’re not saying that compensation and benefits are less important: Of course you need to pay a competitive wage, and of course you need to have foundational benefit programs that can help meet your workforce’s needs at whatever point they are in their lives and careers.

But we are saying that more is not always better. True differentiation and competitive advantage comes from having carefully curated rewards based on understanding what’s important to your workforce, rather than based on what other organizations are offering.

Simply adding benefit options or patterning your own offerings after another company’s program is a no-win race to the top in terms of costs, and a race to the middle in terms of differentiation. And if your company’s package looks a lot like every other, you make it easier to have a revolving door of workers moving in and out, rather than a reason for candidates to seek you out and current workers to stay on board and be engaged.

Today’s workers are typically looking for a relationship with an organization that offers a personalized, flexible, and customized experience—set on a firm foundation of compensation and benefits, but differentiated by other programs that are specifically meaningful to them, including things like recognition, career development, and a holistic approach to well-being.

What do high-performing, mature rewards organizations do? Bersin™ Deloitte Consulting LLP’s research tells us they listen, learn, and design offerings explicitly for their “customers.” High-performing organizations are six times more likely to use data and analysis to understand the preferences of their workers compared to their lower-performing counterparts.

We are actively working with companies across all industries to break the cycle of offering rewards without really knowing their true value or effectiveness. To make that happen, they’re doing things like…

  • Designing rewards programs based on the relationship the organization wants to build with workers, including compensation and benefits AND culture, purpose, learning & development, recognition and their desire to continue to develop into social and business enterprises.
  • Practicing Rewards Optimization which uses conjoint analysis to understand what their workforce values, their rewards preferences, and associated costs.
  • Addressing workforce diversity as they design their relationships and the rewards that support them.
  • Identifying specific rewards that truly differentiate their organization and contribute to its brand equity, and then actively promoting those rewards.
  • Communicating about rewards in a way that’s both holistic, rather than a fractured, program-by-program approach, and targeted, treating their workforce as customers and tailoring communications in a more consumer-like way.
  • Using digital tools and channels to make it easier for workers to understand and access the full spectrum of rewards offerings at the point of need.

We’ll be looking more closely at how organizations are moving from rewards to relationships in follow-on posts. There’s a lot to tell—and a lot your organization can do to realize more value from rewards investments and truly differentiate itself as an employer of choice.

Melanie LangsettMelanie Langsett is a principal in the Human Capital practice of Deloitte Consulting LLP and leads Deloitte’s Rewards and Wellbeing Market Offering.
Garry SpinksGarry Spinks is a managing director in the Human Capital practice of Deloitte Consulting LLP, helping organizations of all sizes optimize the return on their human capital investments.
Naomi BradleyNaomi Bradley is a managing director in the Human Capital practice of Deloitte Consulting LLP, helping companies design, deliver, communicate, and manage the financial and HR aspects of total rewards programs.


1 High-Impact Total Rewards research, Bersin, Deloitte Consulting LLP, 2018.

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