How to drive employee engagement: unlocking motivators beyond pay

1. Total Reward Statements: a comprehensive view of employee value

One of the most effective ways to foster employee engagement is through transparent communication about the full scope of compensation. While salary is a critical component, it is important to recognise the broader set of benefits and rewards that employees receive.

Total Reward Statements provide employees with a clear and comprehensive view of not just their salary, but also their benefits, bonuses, pension and other incentives.

A well-designed Total Reward Statement highlights the value employees receive across different reward categories, from healthcare and wellness benefits to flexible working arrangements and performance-based bonuses.

This transparency helps employees feel more valued, as they can see the complete picture of how their contributions are rewarded. It also reinforces the message that engagement is not just about base pay but the broader experience that the company offers. Total Reward Statements highlight the full value of compensation, fostering a sense of being valued.

For employers facing budget constraints or looking to diversify their employee offering, Total Reward Statements can be a powerful tool to reinforce the importance of non-monetary benefits. As our UK Reward Management Survey shows, many employers are now focusing on how they can map career development for employees and 65 per cent are offering greater flexibility, both of which can be integrated into a Total Reward package that extends beyond financial compensation.

For those offering flexible working arrangements, they are appealing to a broader talent pool. Remote working can facilitate a more inclusive workforce, tapping into under-represented demographics in the workplace who would otherwise be excluded if they were physically required in the office every day, such as those with disabilities or caring responsibilities. This in itself is a key recruitment strategy, as candidates increasingly scrutinise the diversity and inclusion credentials of their prospective employer.

2. Employee Surveys: the power of listening

Employee engagement starts with understanding what matters most to your workforce. Regular employee surveys provide valuable insights into employee sentiment, needs and preferences. These allow employers to understand what drives engagement. When conducted effectively, surveys can uncover areas where employees are thriving and highlight potential areas for improvement.

Surveys can be used to gauge satisfaction with pay, but they can also explore broader themes such as job satisfaction, work-life balance, career development opportunities and overall engagement. 67 per cent are analysing the results of their exit interviews that are an invaluable resource, helping employers understand why employees are leaving and identify any "quick fixes" to improve retention. Analysing these responses allows companies to address common concerns before they lead to further turnover.

In addition to standard employee surveys, more targeted pulse surveys can be used to measure engagement in real-time, allowing companies to track shifts in mood or morale and respond proactively. By acting on the feedback from surveys, organisations can demonstrate that they value their employees' input, which in turn helps foster trust and a sense of ownership among the workforce.

3. Recognition schemes: celebrating success and contributions

While pay provides a baseline level of satisfaction, employee recognition is what truly drives engagement and fosters a positive culture. Recognition schemes celebrate employee contributions, boost morale, and create an environment where employees feel valued. By implementing both informal praise and formal awards, employers can acknowledge achievements, hard work and dedication, reinforcing a culture of appreciation.

Recognition is most effective when tied to specific accomplishments, such as meeting performance goals or contributing to team success. It should also be inclusive and personalised, ensuring employees feel acknowledged in ways that resonate with them.

Reinforcing a sense of recognition strengthens employees' connection to the organisation, particularly in remote and hybrid work environments, creating a sense of belonging and community, no matter where employees are located. Recognition bridges the gap between physical and virtual spaces. This is especially important in a time when remote and hybrid working models are more common.

With 66 per cent of employers leveraging technology such as LinkedIn for recruitment, a culture of recognition not only motivates employees but also enhances an organisation's ability to attract top talent and build cohesive, purpose-driven teams.

Financial incentives beyond pay

 Recruitment premiums and bonuses are common methods used in the attraction and retention of talent. With 42 per cent of employers experiencing recruitment challenges in the last six months, 48 per cent have had to offer new recruits salaries which conflict with those paid to existing employees. 73 per cent of respondents quoted offering up to 10 per cent more.

Prolonged economic uncertainty and wider market pressures are shaping the scale and eligibility of bonus payments. While 68 per cent of respondents report operating a bonus scheme, fewer expect an increase in the size and number of bonus payments. 65 per cent of respondents anticipate that the number of people receiving bonuses will remain the same, and 46 per cent expect the size of bonus payments to stay the same.

A combination of factors shape bonuses, with 63 per cent taking into account individual, team and company performance. Only one third use company performance to determine bonus levels, and even fewer, only eight per cent, purely look at individual performance in isolation.

With affordability pressures ongoing, now is a good time to review current approaches. Bonus schemes provide a low risk option for employers to curate an engaging reward package which rewards the right behaviours and performance in a controlled way.

Putting It All Together: A Holistic Approach to Engagement

The modern workforce is looking for more than just a pay check; they seek meaningful work, career development, flexibility, and recognition for their contributions.

Pay, while essential, is only one part of the puzzle. Employers who want to build long-term engagement must focus on creating a comprehensive and transparent reward strategy, actively listening to their employees, and fostering a culture of recognition and appreciation.

By adopting strategies such as Total Reward Statements, employee surveys and bonus and recognition schemes, organisations can not only improve retention but also build a workforce that is motivated, committed, and aligned with the company's goals. In this competitive labour market, these engagement tools can make all the difference in keeping top talent satisfied, motivated, and productive.

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In the coming year, as pay levels stabilise and economic pressures shift, these engagement strategies will become even more crucial for employers striving to retain talent and maintain a competitive edge. By focusing on the complete employee experience, companies can build stronger, more engaged teams ready to meet the challenges of 2025 and beyond.