In 2025, companies aiming to stay competitive will need to transition from fragmented compensation and benefits programs to a unified total rewards strategy that aligns employee support and expectations with core business objectives. This strategy should cover every aspect of the employee experience—from employee well-being and compensation to career growth.
By implementing a comprehensive, integrated total rewards strategy, organizations can better address the needs of their workforce, attract and retain top talent and drive business success. Yet, despite the clear advantages of this approach, many companies find it challenging to prioritize the key initiatives necessary for a total rewards strategy.
A frequently under-invested area is employee well-being, including support for workers’ physical, mental and emotional health. According to a recent survey from Brightmine, less than a third of organizations have a documented employee well-being program, with strategies related to compensation often taking precedence. However, WellHub research shows employees regard their well-being as equally important as their salary. In fact, 87% of respondents said they would contemplate resigning from a company that does not prioritize their well-being. This reaffirms that no single element of a total rewards strategy should outshine the others. A successful strategy needs to be holistic and balance all components and employee needs effectively.
Let’s explore the three foundational elements of a comprehensive total rewards strategy and how HR leaders can ensure they are making the right investments to support their workforce and achieve organizational success in 2025.
Invest in Employee Well-Being
Employee well-being programs are a vital component of total rewards strategies, as they contribute significantly to employee engagement, satisfaction and productivity. However, corporate well-being initiatives appear to be slipping, with a widening gap between what companies offer and what employees truly need.
Brightmine’s survey revealed that despite many executive leaders acknowledging the importance of employee well-being in relation to overall business outcomes, leadership buy-in and budget prioritization remain lacking. Less than half of organizations (44%) have a dedicated budget related to improving employee well-being, and HR leaders at most companies (72%) have trouble convincing executive leadership to allocate extra budget for well-being initiatives.
To stay competitive, HR leaders should reassess and strengthen their well-being offerings by adopting a comprehensive approach that supports the whole person. This means going beyond addressing physical and mental health to include initiatives that promote financial security, work-life balance and personal growth. By focusing on a broader range of well-being factors, organizations can better support their workforce, leading to improved retention and productivity, reduced employee absenteeism and sustained business success.
Offer Transparent and Competitive Compensation & Benefits
Compensation is the most visible component of a comprehensive total rewards strategy, making it one of the most important factors for success. Employers should aim to align pay with industry standards and legislative requirements, ensure employee contributions are appropriately rewarded and increase transparency in compensation practices. By doing so, organizations can foster a more loyal, motivated and productive workforce.
While the size of paychecks is undoubtedly important, a total rewards strategy encourages employees and employers to look beyond base pay. HR leaders should offer more diverse compensation benefits, such as performance-based incentives or equity awards for senior-level employees.
Regardless of the compensation and benefits plan an employer chooses, educating employees about the available offerings is crucial. HR leaders must communicate the value of the package being offered and how it stacks up against the broader market. And this shouldn’t be a once-a-year discussion. HR leaders should make it a priority to regularly highlight the total rewards available throughout the year.
Equally important is the need for HR to tailor benefits communications to their workforce, dialing them up or down as appropriate. For instance, leaders should consider amping up resources for financial well-being during challenging economic periods to help support employees who may be struggling.
By offering transparent, competitive and personalized compensation and benefits, organizations can foster greater trust and transparency, helping to further enhance workforce satisfaction and long-term retention. In fact, research shows that 76% of workers who understand their benefits are satisfied with their employer, with 50% saying it makes them more loyal to the organization long-term.
Focus on Career Development and Performance Management
Beyond employee well-being and compensation, career development and performance management are essential components of an effective total rewards strategy. These elements provide a cost-effective way to enhance the total rewards package, adding significant value without requiring significant additional funds.
Employees today seek clear paths for career advancement and companies that prioritize this can foster greater engagement, loyalty and performance. The reality is, however, many organizations are falling short of meeting employees’ expectations. According to Gartner research, only 46% of employees believe their organization supports their career growth. Notably, when they do feel supported, their likelihood of being a high performer increases by up to 39%, their willingness to stay at their company increases by up to 19% and their engagement increases by up to 61%.
HR leaders can better support employees by offering career mentorship programs, providing access to continuous learning and skill-building opportunities and implementing regular feedback cycles to ensure employees’ professional goals are being considered.
When it comes to mentorship, Brightmine research revealed that only about half of organizations (47%) have formal leadership development programs in place and roughly one in three offer opportunities for skill-building through stretch assignments and job rotations. This lack of a structured program is a missed opportunity to strengthen the leadership pipeline and drive long-term retention and business outcomes.
Creating a Winning Total Rewards Strategy
In 2025, HR should invest in a total rewards strategy that holistically supports employee needs with organizational goals. By implementing a comprehensive approach that prioritizes employee well-being, competitive pay and benefits and career advancement opportunities, organizations can attract and retain top talent, cultivate a culture of growth and position themselves as an employer of choice.
Sarah Peterson Herr is a legal editor at Brightmine. She is an employment law nerd, working to share her obsession with compliance.