5 min read 
Why Total Rewards Matter Now
In 2025, employee expectations are shaped by a confluence of economic uncertainty, talent shortages, and the normalisation of hybrid work. More than ever, employees seek value beyond the paycheque—holistic packages that offer flexibility, support wellbeing, and provide room for personal growth.
This transformation is visible in the data. A Gallup report found that 64% of UK employees consider non-financial rewards—like flexible hours and wellbeing support—as critical to their job satisfaction. Based on input from our 51,000+ LinkedIn followers, it’s clear that the meaning of value at work is changing. When asked which part of their total rewards strategy had gained the most importance recently, an overwhelming 63% of HR professionals pointed to flexible working and wellbeing. This response signals a major shift: in today’s workplace, how people work and how they’re supported emotionally and physically matter more than ever—often more than pay alone.
What Is a Total Rewards Strategy?
Total Rewards is a strategic approach to employee value that includes all forms of compensation, benefits, development opportunities, recognition, and work-life balance initiatives. According to WorldatWork, a globally recognised HR body, an effective Total Rewards strategy aligns with the organisation’s culture, business objectives, and workforce demographics.
The modern framework typically includes:
- Compensation: Base and variable pay
- Benefits: Health, wellbeing, financial support
- Work environment: Flexibility, culture, inclusion
- Recognition: Performance-based and social recognition
- Development: Learning and growth opportunities
The Chartered Institute of Personnel and Development reinforces that strategic integration of these elements leads to greater employee engagement and long-term business impact.
Compensation: Designing Fair and Competitive Pay
Base Pay, Variable Pay and Total Compensation
- Base Pay: Fixed salary based on role and experience.
- Variable Pay: Incentives tied to individual or team performance.
- Total Compensation: A combination of pay, bonuses, and benefits—what the employee truly earns.
Benchmarking Salaries
Effective salary benchmarking uses tools like Mercer Total Remuneration Surveys, Radford Global Compensation Database, and Payscale Benchmarking to compare salaries across roles, industries, and regions.
Structuring Pay Bands
Pay bands provide a structured framework to manage salary growth, transparency, and equity. Many companies are combining role-based and location-based models for hybrid and global teams. For instance, GitLab publishes its compensation calculator online, showing how location and job level determine pay.
Pay Transparency and Equity
Pay transparency is gaining traction, especially following EU and UK regulations mandating gender pay gap reporting. According to Glassdoor, 67% of employees believe transparency fosters trust. Leading firms conduct annual pay audits, disclose pay ranges in job listings, and use tools like Syndio to detect internal inequities
Global and Remote Compensation Models
To fairly compensate distributed teams, companies use a hybrid of location- and role-based models. Deel, Remote.com, and Oyster HR are key platforms facilitating fair global payroll systems. These models balance cost control with market competitiveness
Benefits: What Matters Most in 2025
Our LinkedIn data confirms that flexibility and wellbeing are no longer perks—they’re foundational. The rise of burnout, hybrid fatigue, and mental health challenges has made employer-provided support systems essential.
Trending Benefits
- Flexibility: Four-day work weeks, asynchronous work
- Family support: Menopause leave, fertility and adoption benefits
- Financial wellness: Pension coaching, emergency savings tools
A report by McKinsey found that 70% of employees prioritise benefits that support mental health and stress resilience.
Generational Insights
- Gen Z wants flexible schedules and mental health support.
- Millennials value purpose-driven roles and career growth.
- Gen X prefers family support and income protection.
- Boomers seek retirement planning and robust healthcare.
Cost-Efficient Benefit Design Smart employers are leveraging platforms to personalise benefit offerings based on employee preferences while controlling costs.
Non-Traditional Benefits
- Pet insurance and “pawternity” leave
- Environmental sustainability stipends
- Volunteer time off (VTO)
- Learning wallets for personal growth
Learning & Career Progression: Rewards Beyond the Paycheque
Although only 5% in our poll selected L&D as the most critical reward, evidence shows that investment in growth opportunities significantly boosts retention. LinkedIn’s 2024 Workplace Learning Report revealed that 94% of employees would stay at a company longer if it invested in their career (LinkedIn Learning).
Strategic L&D Approaches
- Personalised learning pathways
- Accredited CIPD qualifications
- Internal mobility and mentorship programmes
Companies integrating L&D into their Total Rewards strategy are more likely to retain high performers and close future skill gaps.
Measuring ROI and Leveraging Technology
How to Measure Total Rewards ROI
- Engagement: Pulse surveys and eNPS
- Retention: Turnover metrics and stay interviews
- Participation: Benefits usage rates and L&D uptake
- Performance: Productivity indicators linked to reward schemes
Tools Enabling Total Rewards Strategy
- HRSoft: Compensation lifecycle management
- Syndio: Pay equity analysis
- Darwin: Global benefits and rewards administration
- Payscale: Market benchmarking and modelling
HR teams using AI to predict engagement drop-off and tailor rewards accordingly are driving measurable improvements in retention and satisfaction.
Redefining Value in the Workplace
Meeting this challenge requires more than instinct—it demands CIPD-backed expertise, a grasp of emerging tech, and the confidence to lead change from the inside out. That’s where Avado comes in.
Through Avado’s CIPD programmes, we help HR professionals build the knowledge, credibility, and strategic mindset to shape the future of work. Whether you’re refining your organisation’s reward strategy or embedding a culture of equity and growth, Avado gives you the tools to lead with impact.
Explore our CIPD qualifications and take the next step towards becoming a transformation-ready HR leader!
