Listen to article audio:[https://d1lzrgdbvkolkd.cloudfront.net/4209_Audio_91d142f7b6.mp3] Our 2024 rewards research finds dramatic change in the perception and practice of total rewards since our 2018 study. For many rewards functions, that’s something worth celebrating, as they have developed new strategies, adopted new approaches, and established rewards as a critical enabler of the overall talent experience in the business.In 2018, we found the rewards function had some real work to do: the Net Promoter Score1 for total rewards among surveyed organizations was an abysmal negative 15. That’s bad enough on its own, but it's particularly concerning given that organizations spend an average of 62 percent of bottom-line dollars on their rewards offering.2 This low score indicated that total rewards needed to improve its reputation, and the same study also identified a potential cause for this low regard: 80 percent of the organizations we surveyed fell into the low end of our total rewards maturity model.3&nbsp;In 2024, our research shows a real shift in both the perception and the maturity of practice in total rewards. The NPS on rewards has skyrocketed from the poor negative 15 rating to an inspiring positive 37, highlighting an uplifted view of total rewards. At the same time, the ratio of low maturity to high maturity has shifted in a positive direction as well. Although the majority of survey respondents still fall into the lower end of our maturity model, the percentage of organizations at the top end of maturity doubled—against an updated model—indicating that rewards functions have indeed raised their game over the past six years. So, what’s behind this new and improved rewards function—and the sea change in the way the workforce views rewards?&nbsp;<h2> A new perspective on rewards</h2>Organizations are finally beginning to understand and accept that total rewards are not a sunk cost. It is becoming more evident that rewards programs can be leveraged as competitive differentiators as well as critical tools to attract new talent, recognize and encourage performance and growth, support well-being, engage the workforce, and enable retention of the talent necessary to meet organizational objectives. To achieve that level of impact, mature rewards functions are strengthening their practices, solidifying strategies, and honing agile approaches to address evolving business needs and workforce expectations.&nbsp;This is especially relevant for a workforce that knows the options available in the market and who demand a more competitive and holistic approach. Today, rewards leaders are more likely to prioritize workforce experience, treating their employees as customers and listening attentively—and pivoting frequently—to align with their needs and preferences. One demand from workers as well as society has been for greater transparency, often linked to a call for more equitable rewards. Rewards teams are responding, creating better visibility through more open and frequent communication often facilitated by improved technology and data analytics.Compared to 2018, organizations are recognizing that the definition of rewards has broadened beyond compensation and benefits, and they are building more comprehensive total rewards philosophies to reflect this view. Current philosophies include robust approaches to recognition, less traditional elements like growth and development opportunities, and a focus on well-being that goes beyond physical to include mental, financial, belonging, and more.&nbsp;Our <a href="https://action.deloitte.com/insight/4153/2024-high-impact-rewards-research-an-introduction">2024 High-Impact Rewards research</a> finds that these advances in the practice of total rewards are as much a boon for employers as they are for the workforce. Compared to 2018, organizations today are three times more likely to report optimizing a return on their rewards investment and are 15 percent more likely to effectively retain high performers. All this change is reflected in the fact that only 24 percent of organizations remain in Level 1 of the Total Rewards Maturity Model (compared to 53 percent in 2018), and 18 percent are now operating at the highest level of maturity (compared to 4 percent in 2018).4 Simply put, there are more organizations doing more to drive an enhanced rewards experience. However, that means achieving competitive differentiation, and maintaining it, becomes more and more difficult even at the higher maturity levels.&nbsp;<figure class="image"><img src="https://d1lzrgdbvkolkd.cloudfront.net/4209_F01_420abd6138.jpg"></figure>Source: High-Impact Total Rewards research, Deloitte Consulting LLP, 2024.&nbsp;<h2> The path to a more mature rewards function&nbsp;</h2>Organizations seeking to mature their rewards function and establish rewards as a competitive differentiator should consider:&nbsp;<ul style="list-style-type:disc;"><li>Starting with strategy.&nbsp;The strongest driver of maturity is the development and deployment of a clear business-aligned total rewards strategy and holistic philosophy, encompassing a variety of elements beyond the basics of pay and traditional benefits, such as an expanded focus on well-being, development and career, and recognition.&nbsp;</li><li>Creating connections.&nbsp;Do not develop and implement approaches in a vacuum! Build cross-functional relationships within HR and across the business. For example, implementing new rewards technology will likely go better if colleagues from IT, finance, and other areas are connected to support a seamless workforce experience. Similarly, connecting with employees like they are customers may further improve workforce experience through understanding employee preferences and personalization opportunities.&nbsp;</li><li>Committing to communication.&nbsp;Develop a well-defined communication strategy with consistent and clearly branded avenues to help employees understand what they receive and its value as well as the underlying rationale or philosophy underpinning the offering. Additionally, encourage clarity on the variety of offerings available and how to take advantage of them.&nbsp;</li></ul><h3 style="margin-left:0px;"> About the authors</h3>Naomi Bradley has more than 20 years of experience helping companies across a variety of industries design, deliver, communicate and manage the financial, and human resources aspects of total rewards programs. Her focus has been on working with organizations to develop and implement strategies to manage risks posed by their rewards programs and helping C-suite leaders drive an integrated business strategy and culture that provide differentiated rewards programs based on what each organization’s workforce expects and values.Adam Ekl is a senior consultant in Deloitte’s Rewards and Well-being practice. With more than 10 years of human resources and total rewards experience, he serves clients and the firm in several capacities, focusing primarily on compensation and total rewards strategy, pay program design, incentive compensation, and job architecture. Adam has built expertise across several industries—most notably in consumer goods, ER&amp;I, and sports management—helping clients to develop rewards strategies that align with broader organizational objectives and differentiated rewards programs that underscore organizational culture and workforce values.Michael Gilmartin is a Senior Manager in Deloitte Consulting’s Human Capital practice. With more than 20 years of human resources and employee benefits experience, Michael works with global clients on their rewards, recognition, and well-being plan and program strategy. From design to delivery to administration, Michael helps clients maximize plan and program impact, empower worker engagement, and drive sustainable performance. He is one of the leaders of Deloitte Consulting’s Workforce Well-being point-of-view and advisory services in the United States.Julie Duda is a Vice President with Deloitte Consulting LLP, with a career of more than 20 years in the human resources field. After several years in corporate talent management, Julie transitioned to become an advisor to human capital leaders, leveraging research-based insights combined with perspectives gained from working with clients across various industries to craft narratives to support better decision-making. Today, Julie leads research and sensing efforts related to topics like Total Rewards, Performance Management, Diversity, Equity, &amp; Inclusion, and Workforce Experience. Julie brings together the research we conduct and her experience working with clients over the years to develop on-the-pulse insights that lead to material outcomes. Julie knows there's nothing better than helping people reach success.Pete DeBellis is a Managing Director with Deloitte Consulting LLP, specializing in People Analytics, Rewards, and the Life Sciences &amp; Healthcare industry. A leader of client delivery and a market-facing lead for Insights2Action’s research and service delivery, he has built a career that ranges from consulting and human capital research to entrepreneurship and running small businesses. His direct experience drives his passion for making work better for people and people better at work—for clients and colleagues alike. He provides clients with a unique perspective to reach sustainable outcomes. Footnotes<ol><li>“Net Promoter Score” (NPS) is based on the fundamental perspective that every company’s customers can be 1. divided into three categories—promoters, passives, and detractors. By asking one simple question, “How likely is it that you would recommend [Company X] to a friend or colleague?” you can track these groups and get a clear measure of your company’s performance through its customers’ eyes. Customers respond on a 0-to-10-point rating scale and are categorized as follows: “Promoters” (score 9 to 10) are loyal enthusiasts who will keep buying and refer others, fueling growth. “Passives” (score 7 to 8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. “Detractors” (score 0 to 6) are unhappy customers who can damage your brand and impede growth through negative word of mouth. To calculate your company’s NPS, take the percentage of customers who are promoters and subtract the percentage who are detractors.</li><li>Employer Costs for Employee Compensation – June 2024,&nbsp;Bureau of Labor Statistics / U.S. Department of Labor, 2024.</li><li>High-Impact Rewards research, Deloitte Consulting LLP, 2018.</li><li>High-Impact Rewards research, Deloitte Consulting LLP, 2024.</li></ol>

Our 2024 rewards study reveals improved rewards perception and impact.

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Cross-Industry

Our 2024 rewards study reveals improved rewards perception and impact.

High-Impact Rewards: Rewards is on the rise 

With the nature of work, the workplace, and the workforce rapidly changing, high-performing organizations are pivoting to a more strategic view of rewards—looking beyond a paycheck and basic benefits to offer a compelling rewards and wellbeing program that considers the totality of the relationships organizations need to create with their workforce.