Research Shows Remote, Hybrid Work Morphing Total Rewards Strategies

Remote and hybrid work arrangements continue to shape and alter organizations’ total rewards offerings, according to WorldatWork’s latest Total Rewards Inventory of Programs and Practices (TRIPP) Study.

Published in September, the study found 78% of participants now report remote or hybrid work as their organization’s primary work arrangement, with the most common being a hybrid model where employees split their time between the office and a remote setting.

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This new normal has had a ripple effect on compensation, benefits and more, requiring total rewards (TR) professionals to reevaluate their offerings. For example, on-site health and welfare programs have seen a significant drop in benefit package inclusion, while paid parental leave has seen a 27% increase since it was introduced to this study in 2016.

The latter is primarily due to more states and municipalities enacting requirements for paid parental leave. According to Liz Supinski, WorldatWork’s director of research and insights, remote work likely influenced and accelerated that trend from a benefits perspective, as employers are now more apt to have different employees covered by different leave rules. Additionally, employers broadening their talent pool by dipping into remote work are crafting benefits packages to attract and retain those workers.

The WorldatWork study, which reflects TR programs and practices for the 2023 plan year, covered offerings from base pay and incentives to paid/unpaid time off and retirement to development opportunities and workplace flexibility. A total of 1,116 responses were received, representing U.S. organizations of different sizes and across multiple industries. Participants included TR practitioners, non-consultant/non-academic practitioners, and consultants on behalf of a client. This is the eighth time since 2015 that WorldatWork has released a total rewards inventory report.

Supinski recently shared additional insights with Workspan Daily (WD) about the new study and how this research can help TR pros better understand and improve their rewards offerings moving forward.

WD: What TR areas increased the most in usage in 2023? And, what are some possible reasons for the increases?

Supinski: Because we are seeing more remote and hybrid work, employers are increasingly tailoring compensation to be competitive based on the location where work is performed. Geographic and locality pay adjustments are up 20% from 2022. Career pathing/resource centers — if delivered remotely — may be gaining in remote/hybrid environments, where career coaching is typically less formal and opportunities are seen by workers as being diminished.

There is also a demand for work-life balance programs, so we are seeing more offerings tied to remote work, stress-reduction, additional leave and redirecting paid time off (PTO) to savings.

WD: What areas declined the most in usage in 2023? And, why do you think these areas decreased?

Supinski: Decreases were most evident in areas that were tied to five primary trends.

Workplace location. We saw decreases in on-site programs — such as free/subsidized parking, healthy cafeteria/vending machine options, work-environment initiatives or on-site fitness — as the result of more remote and hybrid work. We’ve also seen a decrease in programs like job rotation and suggestion/idea programs that are likely to be easiest to implement onsite.
Care- and leave-influenced benefits. Dependent care flexible spending account and childcare resource/referral programs both decreased. Companies may have cut back these programs due to reduced demand. Some remote and hybrid workers may no longer be using formal childcare, and an inability to find formal (legally reimbursable) childcare due to “childcare deserts” may have also reduced employee interest in these programs. Unpaid leave for civic duty or sabbaticals was also likely less appealing to both businesses and workers in an economically constrained environment. In addition, there was a reduction in “ad hoc telework” programs, which were likely simply replaced by formal remote/hybrid programs plus informal flexibility.
Socio-political sensitivities. We saw decreases in diversity, equity and inclusion (DEI) learning and environmental, social and governance (ESG) initiatives likely driven by the current socio-political climate.
HR objectives. Performance sharing for organizational objectives and for individual performance were both down. However, in more detailed incentive studies, we’ve seen that these decreases were accompanied by simultaneous increases in short-term incentives built on a combination of individual and group objectives. I believe that this reflects a change in program design rather than a retreat from performance-based incentives.
Labor market. The loosening of the labor market led to a reduction in “nice to have” (as opposed to core) benefits like concierge services, online fitness, or access to personal-interest (as opposed to work-related) conferences and/or seminars. And, we saw a reduction in attractors like sign-on bonuses or shift flexibility that experienced a surge in use for hourly workers during pandemic recovery.

WD: What are some of your biggest takeaways from this year’s report?

Supinski: The biggest takeaway is that many more benefits saw declines than increases. Bearing in mind that benefits programs for the 2023 plan year were selected in 2022, this is an unsurprising result of two main things, in my opinion.

First, the economic environment was very uncertain, with credible predictions for a 2023 recession. In that environment, decision-makers likely assumed that (a) they might have to belt-tighten in 2023, and (b) the labor market would soften and competition for talent would decrease, so belt-tightening wouldn’t be too detrimental. Second, healthcare costs for firms that are self-insured and health insurance costs for fully insured organizations continued to outpace inflation and, thus, take up a bigger slice of the benefits pie each year.

WD: How can organizations use this report to better understand and improve their total rewards offerings?

Supinski: Surveys like this one can help organizations identify potential new benefits offerings that haven’t popped up on their radar in the past and find programs that may need evaluation to see if they’ve retained their value proposition. That said, it’s important for organizations to tailor their benefits packages to their workforce’s needs, ideally by including employee input into the decision-making process. Just because other organizations are offering (or not offering) a benefit doesn’t mean it should be your firm’s choice. For instance, onsite childcare is an uncommon offering but can make a huge difference in attraction and retention if most of your workforce has dependent children and existing childcare is scarce or insufficiently flexible. On the other hand, self-paced online training is a common offering but might be less appreciated (or seen as less useful) by some worker populations.

Benchmarking data like this survey provides one type of data for building a comprehensive rewards program. Combined with data on employee interest, program cost and program utilization, benchmarking data can help organizations build comprehensive rewards programs that make the best use of resources while improving employee engagement, attraction and retention.

WorldatWork’s comprehensive Total Rewards Inventory of Programs & Practices report is available to association members. The latest version of this study, published in September 2024, reflects practices for the last complete plan year, 2023. To learn more about membership, click here.

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