There are many factors to consider with transitioning to totalrewards, but the 5 listed should provide a strong starting point.(Photo: Shutterstock)

Benefits and compensation plans are evolving in theworkplace as the workforce and nature of work continues to changein light of digital trends, employee expectations, and the need to meetthose expectations while keeping costs in check.

Vendors and consultants are continually developing new ways todeliver those benefits to their clients. Theytout the opportunities for cost savings, operational synergies, andimproved employee perception which in turn improves attraction andretention.

Companies can be tempted to take the plunge and transition froma siloed approach to a holistic one, often titled “total rewards“: a benefits approach thatencompasses health, retirement, well-being, compensation and morerecently employee experience.

But is this approach right for you, your company, and youremployees?

Total rewards transformation is no small transition. While theopportunities for greater savings and improved employee experienceare significant, the challenge of transformation itself may be aroadblock. Consider these five factors before deciding to go downthat road:

1.  Stakeholder buy-In. Total rewardstransformation involves many aspects of a company's business, andwith an increasingly crowded C-Suite, it's important for there tobe sufficient buy-in for the transition. CHROs, CFOs, COOs, andCXOs are just a few of the decision-makers that must be on board toachieve holistic transformation.

Reaching consensus on what a company-specific total rewardsoffering should be can be a daunting task, and if that consensuscannot be reached, efforts to transform may be doomed to failurebefore you even begin.

2.  Corporate culture. If the initialchallenge of stakeholder buy-in is achieved, the planning phase fordefining what benefits and services are to be offered (and how)must be in alignment with overall corporate culture.

Services provided must hold true to your company's core values.Having that approach clearly defined will provide strong guidancein terms of services and vendor selection.

3.  Digital infrastructure. Is yourcompany digital savvy? Do you regularly modernize your employeedashboards and digital tools, or have you kept legacy systems thatare years behind the times? If your digital capability isn't up tomodern standards, the cost of total rewards transformation willincrease.

Your digital and IT infrastructure must be modernized toproperly convey and administrate your new benefits services, as theholistic approach can be complex and hard to communicate to yourworkforce, particularly at the outset.

4.  Workforce profile. Is your companyboutique, mid-sized, or large? The answer to that will greatlyimpact the complexity of your engagement strategies when making thetransition to total rewards.

Beyond the size of the workforce, one must also consider itsdemographics. As with the workforce, the scope of geographicpresence also greatly impacts the complexity of total rewardsofferings.

Moving away from the siloed approach, companies that embracetotal rewards place additional emphasis on well-being and employeeexperience in the same breath that they speak of traditionalhealth, retirement, and compensation benefits.

But how these services are defined can depend largely on yourgeography. Employee experience, workforce perspective andexpectations can vary significantly based on culture. Even moreimportantly, the dynamics of regulatory environments lead toincreased compliance complexity and concern. This is yet anotherimportant factor to consider when deciding to make the leap tototal rewards, as it may increase your operating costs.

5.  Change management capability.Transformation that impacts across the enterprise can fall flat ifnot effectively communicated to all involved. Well-designedcommunication strategies are essential during a time oftransformation that is highly dependent upon employee participationand enrollment for success.

Multigenerational workforces require multipronged approaches tocommunications, including traditional approaches (enrollmentpackets, meetings) and new digital mediums (online platforms,mobile apps). The cost of the engagement strategy can vary greatlydepending on its complexity, and may require the assistance ofoutside firms to facilitate it if your company does not have aninternal change management office, which in turn raises the pricetag.

If you do decide to transition, you may need outside help.Luckily, you have a plethora of options. For pure consultativesupport, particularly for large multinational companies, PwC,Deloitte, and EY are great options to consider. For those seeking ablend of consulting and benefits administration support, Aon andMercer are strong contenders. Plenty of firms that offer tacticalor niche support can be of value as well, such as The Segal Group,with significant experience in the public sector.

There are many factors to consider, but those listed aboveshould provide a strong starting point. Total rewardstransformation can be daunting, but the end-state can be worth theinitial effort.

Matthew Merker is a Senior Analyst withALMIntelligence, providing competitive intelligence in themanagement consulting industry. Matthew has researched the benefitsconsulting industry for over four years, bringing in-depth analysisof defined benefit, defined contribution, private exchange, health,and well-being. Previously, he has worked as an Associate andSenior Consultant for Booz Allen Hamilton, providing managementconsulting services for public sector clients, including theDepartment of Defense, Department of Homeland Security, andothers.