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Totally Rewarding Chats | Ep. 06: Customizing Total Rewards for Diverse Employee Groups

Kim Seals discusses the need to think about total rewards holistically and the importance of customizing total rewards for different generations and tailoring communication for diverse employee groups.

Totally rewarding chats with Kim Seals

It's time to think holistically about total rewards

Kim Seals and Sean Luitjens discuss the evolution of total rewards and the importance of linking it to the employee value proposition. She emphasizes the need to think about total rewards holistically, beyond just compensation and benefits, and to consider factors such as career opportunities and work-life balance.

Kim also highlights the importance of customizing total rewards for different generations and tailoring communication strategies to meet the needs of diverse employee groups. She and Sean explore the role of technology in total rewards. By leveraging data analytics, organizations can optimize total rewards spending, ensuring it aligns with unique employee needs. This targeted approach can lead to increased employee satisfaction and loyalty, ultimately strengthening an organization's competitive edge.

Sean and Kim Seals

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Episode transcript:

Sean Luitjens
All right, thanks everyone for joining another Totally Rewarding Chats. And we will be totally rewarded since we have Kim Seals | West Monroe here today, who I have known for many years. How are you, Kim?

Kim Seals | West Monroe
I'm good, Sean, how are you?

Sean Luitjens
I'm great. Thanks for joining. I think the easiest way to get started would be you have a unique past like everyone. So if you can give us the elevator pitch of that so that I don't butcher it, that would be awesome. We'll be fast where we are now.

Kim Seals | West Monroe (00:22.951)
Yeah. Sure, sure, sure. I'll give you the high level Cliff Notes version. I started my HR career in corporate HR roles. So an HR generalist, the head of total rewards, had the chance to work in various parts of HR before I started my consulting career. Have spent the last 25 plus years of that consulting, PWC at Mercer, and now I am at West Monroe Partners where I'm a senior partner in our organization and people practice. And we focus on all things related to Oregon people, including total rewards. So happy to be here today and chat with you about this important conversation.

Sean Luitjens (01:11.286)
So 25 plus years, I always sum up mine as I started last millennium. I think that's cool. So I wasn't gonna call you out that was there. I guess I met you this millennium. So.

Kim Seals | West Monroe (01:15.922)

Hahaha. You did. Well, yes, I mean, yes, if we think about when I joined Mercer, it was 20 plus years ago. So the good news was it wasn't the 2000s. We don't have to go back to the 1900s. But yeah, it's been a while.

Sean Luitjens (01:30.379)
Yes. Yeah. That's all good. And things have changed. So actually with all that perspective of those years experience, what, just to get things started, what is the number one thing that you're intrigued by right now in the total award space?

Kim Seals | West Monroe (01:51.379)
I think it's how you link total rewards to your employee value proposition. And also how you think about total rewards more holistically. I would say when you and I first started doing this back when we were kids, total rewards was comp and benefits. Like, what is your comp plan? What are your benefits? Together, that's your total rewards. And certainly over time, that thinking has evolved to be more holistic, to say, actually, total rewards is more than just what you're paid and what your benefits are.

It's also what your career opportunities are. What about career pathing? Do I have the opportunity to grow and develop? What's my pay time off? What does my work-life balance look like? That's now all part of total rewards. And I think thinking about that more holistically than perhaps we did in the early days has really made the total reward strategy and the role of head of total rewards a much more compelling job and much more interesting in terms of how that factors in to the overall employee value proposition that of why does somebody go to work at a company? Why do they stay there? What is the value prop for the employee? So that's what I am really interested in is talking about those intersections and how this all fits together.

Sean Luitjens (03:08.818)
So if we dig into that, because one of the, I don't think it's anyone else's quote, but I don't know if it's great either, but I always say humans are highly statistically probable and individually unique. And so how do you help organizations take this employee value proposition and push it down? Because I agree with you 100%.

One employee is going to be like, I really don't care about careers. Show me the money. And another person's going to, you know, say, you know, career is very valuable, but how do you put a dollar value on that? Because that fundamentally is what I've struggled with over the years. When you talk about comp five, we used to call it, right? The, you know, this reward thing, how do you put a dollar figure on it? And how do you help organizations communicate something so soft?

Kim Seals | West Monroe (03:52.775)
Well, we think about the employee value proposition through a number of different lenses. We think about it through an internal lens of what is the experiential path an employee has. How does it all interconnect between the job I have, how I'm paid for that job, what the culture of the organization is, all that fits together. But we also look at the external labor market dynamics. We spend a lot of time working with our clients, helping them contextualize what type of talent are they recruiting from where are they recruiting it? What do they need to be successful and competitive? So throughout all that, we do weave in a lot of data. And I'm also super excited about the point you brought up about not everybody wants the same things, right? And I love to see the research out there right now where it breaks down total rewards generationally, right? And if you think about all the generations in the workforce and what everybody is most interested in, it varies. And I think it's important for us to realize that you can do those conjoint analysis out there. You can force people to stack rank what they like and what they don't like. And it's really pretty cool to look at it and then break it down generationally. And some of the most recent results that I've seen will show you that the earlier in career folks, they are all about the work-life balance. They're not about the financial compensation. So you have those folks maybe 25 and under who are just focused on, is this a job where I can still live my full life, right? Then you get into that sort of 25 to 50 year old crew and their number one priority is financial compensation. They're in it right now, they're in their really critical wealth accumulation years where I've got to be saving for retirement. I'm generally perhaps starting a family, I'm thinking about... the cost of that get all the way to 50. And then we see it switch back again. And the folks that are 50 and older, they go back to saying work-life balance is more important to me, right? So I've had my earnings years and now I'm back to work-life balance. And when you think about that and you say, well, I'm spending a lot of money for programs that some of my employees aren't really using, right? And so maybe there's a way for me to repurpose some of those dollars. So.

We do take a data-driven lens to this to look at what the employees are saying, what is the perspective of the organization, how much money are you spending on these various buckets of rewards, and then who's participating, who's eligible versus who's actually taking you up on it. And then you can make some really informed decisions about how I might wanna redirect the spend of my total rewards package. Because it is, as you know, Sean, the biggest expense you have is your expense of your people.

And if you don't get it right, or you're not targeting it at the right groups, it's not really impacting retention, engagement, all of those things that you care about.

Sean Luitjens (06:49.15)
So are you able to, with the ability to have more data and the ability to process more data, are you able to then also kind of create a table of my high value employees or the high departments? Because it might not be used a lot, but it's used by the people that really matter. And how are you working through organizations like that? And then how do you, I guess, deal with outliers? So jokingly, I'm in my, we'll just call them 50s, going on about 19.

You know, how do you deal with people that are kind of on the outside of those? You know, you've got all these unique individuals, right? So how do you let a department create mass programs that look at it holistically to get the most value out of their dollars, but allow them the flexibility to deal with individuals they need to attract or retain?

Kim Seals | West Monroe (07:39.671)
I think it depends on what topic you're talking about. In learning, you're certainly able to create individualized experiences, right? The technology is there. You can, for the folks that don't wanna sit in classroom and they want those microburst type learning programs, you can push that out, right? Versus the folks that wanna go into the classroom and maybe learn that way. But when you get to some of these other programs, it's just not practical to say, I'm going to...

I'm going to have individual health insurance plans at that employee level. Now, you're gonna have a variety of choices that you hope will meet the needs of the different personas of folks that you have working for you. But also, I'll tell you one of my favorite examples is the EAP. It's a super inexpensive benefit, but most employees don't know about it, and it can be super, and it can be really helpful. Like...

Most people think EAP, oh, it provides us with mental health assistance, but it actually has financial assistance, it has legal assistance. So some of it is about promoting these programs in a way that resonates with the groups of folks that you want to use the benefits, right? And just taking a look at, again, that distinction between who's eligible for this program and who's actually using it, and then how might we do some targeted communications. And then for the folks where maybe these programs aren't of interest to them. If you think about the folks that are 26 and under in the US, a lot of them may be on their parents' healthcare, right? So they don't really care about health insurance yet. It's not important to them yet. So, you know, they don't have, maybe there's some other ways you can incentivize them for spending those dollars elsewhere, right? So I think it's, when we're looking at this,

We are looking at it big picture at the plan level, but then we're also giving them some ideas by persona. So we just helped a company think about, they had some legacy bonus programs that were not really delivering the impact. Well, what if you rolled all of those together and created some new type of performance-based incentive program, then you could take your same dollars, but allocate them differently in a way that would actually be more impactful to the group. Because we saw a real... desire that the employees of this company had for more cash in their pockets if they were performing better and doing better. So we had all these legacy, you know, kind of various spot bonuses or reward points or things like that were costing real dollars to the organization. Those weren't particularly valued. Take that money and put it in a performance-based incentive plan.

Or give that money to frontline supervisors and allow them to drop spot bonuses on their employees real time as they're actually delivering results. Because again, you know, think millennial generation, Gen Zs, they're all about that real time feedback and giving them extra cash when they do something that they think is worthy of it is really helpful in rewarding them. Whereas maybe the older or later in career folks are, they're fine to wait for that annual bonus because it's gonna be a bigger bonus, right? And it's that more traditional. We get paid out our bonus at the first quarter following the year that we delivered high performance. You've got folks on your team that want more immediate feedback. They're expecting more immediate feedback. So spot bonuses might be more important to them.

Sean Luitjens (11:04.254)
Well, I definitely prefer being called later in career than older. Oh, that's great. I appreciate that. I'm going to use that now. I'm not old. I'm just later in my career. Do you see organizations, um, going towards kind of flexible total rewards? So here's, you know, I guess way at the other end of the spectrum, but to give some perspective, um,

Kim Seals | West Monroe (11:08.6)
That was a slip of the tongue, yes. You're later in your career, yes.

Sean Luitjens (11:27.166)
You know, here's your base pay and then you get $15,000 in, you know, extra money to be spent or to go in your pocket. Um, so that your total, your total package for the year is the same as everybody.

Kim Seals | West Monroe (11:40.203)
You know, there was a time back in, say, back in the day where flexible benefit programs were kind of the rage. And it's like, look, we'll give you the money. You go do this cafeteria choice style thing. I think it's more of a hybrid now. There's some things that you don't have a choice on, but then other things you can decide. Do I want to buy additional life insurance? I'm going to get a basic level of life insurance the company gives me, but then do I want to buy up on that coverage? Or do I want to buy coverage from my dependents? Or...

I'm getting some disability coverage to my employer, but do I wanna buy more? So those types of choices, but I don't run into any more those big hard to administer flex benefit plans like we used to see 20 years ago where it was all about the cafeteria plan and the choice and all that kind of stuff.

Sean Luitjens (12:28.618)
And so that's one last question around this. So you've got these different levels or generations of employees. Do you also kind of bifurcate the communication out to that? Or how do you help organizations communicate? Because obviously you've got different employee value propositions. So is it one communication? Or do you create multiple communications? Or I'm kind of curious on that piece.

Kim Seals | West Monroe (12:54.155)
I would say it's one communication strategy with multiple ways to deliver it, right? So you think about the folks that perhaps want to watch a short video where something's explained to them versus the ones who want to give me the piece of paper and I'll read it and I'll absorb it. And then the folks who might want an interactive website, for example, to model out retirement and how much am I saving.

So you have one overarching communication strategy, but then you have different ways you can slice and dice it so that I can find the way that most resonates with me to learn more about my benefits. And then we have to think about bringing the whole family in, right? Because in some cases, you know, maybe I'm not the one who's actually gonna decide what the family benefits are. I've got a spouse or partner that I need to consult with to say, are we going on my benefits? Are we going on your benefits? Where are we putting the kids?

Where do we want to spend our money? So that information has to be accessible outside of the work environment. It's got to be information I can access and absorb and interact with when I'm at home. And so that's what I mean about just different ways to deliver the communication. But it's generally a comprehensive interwoven communication strategy, if you will.

Sean Luitjens (14:09.046)
That's actually a really good point. I guess I hadn't thought about that all the years that I've been told. Um, so my, my wife was a, uh, you know, had her own law firm. So we rode my benefits and, um, the sheer volume of times I was told that's not what I was looking for to make that decision. You have to go back and get it and go back and get it and go back and get it. That that's a great point because, um, I think my expectation was sure. I have to go get it. It would have been a lot easier.

Kim Seals | West Monroe (14:13.66)
Ha ha. Mm-hmm.

Sean Luitjens (14:33.942)
For her to kind of manage the whole process if she could just have access and figure things out. And let's be honest, she's making all my decisions. So that would have been so much easier. I was just the go-between.

Kim Seals | West Monroe (14:41.404)
Ha ha! Yeah, for sure, for sure. And then also, I mean, while we're talking about it, what's the definition of a family these days, right? I think we have to be much more inclusive. We have to be much more thoughtful. We have a different definition of family, a broader definition of family than perhaps we've had in the past where we recognize that some folks might be caregivers to children who are not their child, maybe their grandchild, their niece, their nephew.

Maybe some situation like that. And I think, again, we have to think more broadly about what does the family look like and how do we make sure we're meeting the needs of the families of our employees?

Sean Luitjens (15:21.954)
It really is. And you mentioned the 26 year old, like, so we'll have our last one coming off the payroll at some point, right? And out of school and, you know, do they stay on ours or is it more cost effective to be on theirs? And so you're not just comparing one plan, you're comparing multiple plans and benefits and how do you do that in a way that's easy for both parties, which is, you know, difficult. So, and then, you know, that has real value, you know, especially, you know, the cost of benefits right now.

Kim Seals | West Monroe (15:27.399)
Yes. Yeah, for sure, for sure. And then being clear in your communication to your employees, who's covered by what plans? Some plans have access covers for dependents, some don't. Some are just employee only plans. How do you make it easy? In my mind, a lot of the utilization issues that employers see on their benefit plans is because employees don't understand how to access the benefit, or they may not even understand they have it. So that communication strategy, like we were talking about, is just so important.

Again, you're spending so much money on these programs. Make sure that you spend the right amount of money, the time, the thoughtfulness, and how you communicate it, and how you engage with employees in a way that makes them wanna take advantage of them.

Sean Luitjens (16:32.194)
So being the tech nerd in all this, I always kind of usually end up as kind of the third pillar of all this is, do you see technology helping or hindering this? Because I think as we've talked about more specifically in the Comp and Bend tools, there's a lot of cool technology that does a lot of cool things. The communication piece is still not, still has to be kind of human.

Driven so are you seeing technology play a role in this or become a little bit of a hindrance because they think it'll magically solve it

Kim Seals | West Monroe (17:04.047)
You know, I might say something pretty unpopular here, Sean, is I think we've over-indexed on technology. And by that, I mean, you can go out onto your benefits website at your employer, and there's like a hundred different widgets they've loaded up, or apps, or things they've given you, and it's overwhelming. I have my wellness app, I have my retirement planning app, I have, you know, it's just, how do I bring it all together?

And some employees, they might like to model out the choices they have for health care. Should I be in the high deductible plan or should I be in the low deductible plan? How do I think about my expenses? Or I'm going to say for the 401k, how do I model out different scenarios for how to invest my money in the 401k? Or how do I think about how much money I should be saving? And okay, I'm over 50 now and now I can do a catch up contribution. And so I go out.

And I get a little overwhelmed with all the different widgets or tools that I can use and, you know, how can you make it easier for me? So you definitely have the crowd that's self-service. Put it out there, I'll figure it out myself, I'll sign up. Then you have the folks that maybe they want to see it online, but then they want to talk to somebody before they make a decision, right? So I really like some of these wrappers that we're seeing, wrappers around all the different tools so that it's coming together in a comprehensive communication framework.

But then I can click through based, not based on me understanding what tool I need to go to, but based on what my situation is. I'm planning for retirement and I wanna think about how much more I need to save before I can retire. That's how my brain is processing what's going on with me. Don't make me go look for the Principal app because I have to know that Principal is our retirement vendor, right? Or, you know, New York Life. Let me think about this the way I think about it and then access the information.

So I think we've gotten so excited about all the tools that we just sort of launch them out there to the employees without a thought to where, how are they actually going to engage with those tools? How are they going to absorb all the choices? And how do they really understand how to use those tools? And then what if I need to actually speak to a human? How does that work? Can I speak to a human anymore? Or not?

Sean Luitjens (19:12.874)
No, I'm with you. I, um, my soapbox that I've been riding on presenting recently has been, you know, define where you want to be. Technology can do almost anything for you in the, you know, I'd say it's probably flipped on his head in the past. And in the time I've known you, we used to be semi-limited in what you could. Do and deliver, um, calculate, et cetera, by the tool. And so you back your policy or your communications into the tool. And now we have kind of unlimited tech.

What do you want to deliver to who, when and how, and then figure the tech out. Don't kind of be the hammer looking for the nail piece. So actually this over-indexed on tech thing, I'm with you from the standpoint of don't start with the tech and think you just have to have the cool tech. Figure out actually what you wanna do and why, and then there's obviously gonna be a solution for it out there.

Kim Seals | West Monroe (20:04.383)
Sure, and think about the employee experience you want to create and what do you want that to look like. And then, and we do, we, we do that a lot where we have these workshops with employee, with, with companies where we help them think about what they want the employee experience to be. And we say, let's be technology agnostic. Let's just talk about what you want. And then we'll figure out what the technology looks like on the backend, as opposed to I've already got this tool and now help me figure out how to make it work.

Sean Luitjens (20:29.066)
Yeah, no. And I guess I'd say the exact same thing. We, we run into it a lot with talking to prospects with some of our tooling and they're like, oh my God, that's so awesome doing it. And then we start to say, well, how do you want that to look? What do you want to deliver? And they're like, I don't know. I'm like, well, you've got to go figure that out. Right. Because actually we can do kind of anything you want. You don't have to fit that into the box anymore and back into it. So I think it's kind of interesting from the standpoint of the practitioner. Um,

Kim Seals | West Monroe (20:43.976)

Sean Luitjens (20:55.71)
In the past, you had this kind of false box that you were able to work in. And now actually you can really think strategically about what you want to do, why, et cetera, and the how actually you can back into. And so I think that's really cool time for practitioners now, but to your point, they really have to think about what they want to do and achieve. It's not limited by the tech.

Kim Seals | West Monroe (21:17.851)
Right, for sure, totally agree.

Sean Luitjens (21:20.334)
So as we get down here, I always like to ask, is there one very technical term here, Kim? So if you need me to help you with it, it's fine. If you could automagically solve one issue in total rewards, what would that be?

Kim Seals | West Monroe (21:28.371)
Hahaha. I think it is that intersection of my pay, my benefits, my career, my work life. What does that intersection look like? And how do, and as an employer, how do I think about that more holistically for my employees? And if anybody can crack the code on that, I think that would be to me the employer of choice, if you will.

Because I think what we see is employers are maybe really good in one area versus another. They have a really good leadership development program. They've created a really cool job architecture where I can path my career and I know where I'm headed, but maybe the benefits haven't been updated in a while. Or the pay, the short-term incentives are not directly aligned to the performance expectations of me. So...

You know, they haven't looked at their bonus plans in a while to think about, are you driving the behaviors you want to drive? So it's really that perfect storm of how do you get all four levers going at the same time? And I think that's really cool to envision what that real North Star looks like for that.

Sean Luitjens (22:38.438)
And I guess I'd add, and then allow the each employee, I guess that's probably what you're saying, each employee to kind of pick where they are with each one of those levers and then have that delivered individually to me.

Kim Seals | West Monroe (22:46.747)
Right. Mm-hmm. Right, there's some personalization there for sure.

Sean Luitjens (22:53.94)
That's awesome. So any final thoughts before I let you off the hook?

Kim Seals | West Monroe (22:58.583)
I think we've covered a lot of ground here today, Sean. It's been great to catch up and certainly appreciate the opportunity to talk about this from multiple perspectives, not just from the employee perspective, the employer perspective, all the different levers like we talked about. I think it's been great. So enjoyed the conversation. Thanks.

Sean Luitjens (23:14.038)
This is great. Thanks again for coming. And for those that are watching slash listening, I will have Kim's email and contact information there if you want to reach out and leverage some of her genius. Thanks.

Kim Seals | West Monroe (23:27.294)
Thanks, Sean.

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