Total Rewards is at a crossroads. Increasingly, employees are wielding greater influence over what’s offered, and are confident enough to switch jobs based on the content on benefits packages. But employers are scaling back, often shy to spend under the pressure of inflation and the often confusing signs of a recession that may or may not come to pass.

But despite these headwinds, employees are ready to change for better learning opportunities, career growth, the ability to work remotely, and for an employer who supports mental health. Compensation always matters, especially with inflation pressing on everyone’s budgets, and employers can’t afford to not consult their workforce on the matter of total rewards.

“What benefits managers struggle with, myself included, is that we think we know what you want, but we don’t actually know what you want,” said panelist Jeanne Walsh, director of benefits and global mobility for biotech company Boston Scientific. Walsh was one of four panelists who participated in a discussion titled “How the Definition of Total Rewards Is Changing,” during From Day One’s April virtual conference on how employers can use total rewards as a differentiator in the job marketplace.

To actually know what employees want, Walsh consults the company’s employee resource groups. At Buzzfeed, director of global benefits, Hannah Wilkowski does the same. When asked to weigh in during the thick of Covid, the parents ERG said they just needed more paid time off. “We gave everyone one monthly self-care day that does not roll over.” The change satisfied a specific need, and the company still makes that available to all, not just parents.

As employees get a bigger say in company benefits, there is an increasing need for them to be customizable. Employees want a say in what they use and how they use it, said panelists.

The director of people and talent at financial wellness company Northstar, Stephanie Denton, said the company’s clients have employees who want one-on-one attention, a range of options, and personalized financial education for their unique situation.

“Financial support or education means something completely different to a Millennial, or a Gen-Xer or Gen-Zer than it does to our employees who are 10, even 15, years away from retirement,” said Walsh.

When options are customizable, employees may feel a greater sense of respect. Rolling out a new benefit, especially one requested by your employees, is a way to reinforce a sense of belonging, said Matthew Tremmaglia, the VP of customer success at Achievers, which makes employee recognition software. “[Employees] feel like they’re part of the organization and feel like their organization understands themselves as an individual,” he said.

But not every request can be satisfied, and panelists urged employers not to be reactive when new benefits are requested. You may already have what they’re looking for. “Look within all the services to see what else is there, because oftentimes someone will ask for something, and it’s something we already offer but don’t promote,” Wilkowski said.

Realistically, budget doesn’t allow for reaction. The reality of total rewards post-Covid is that some benefits have to be rolled back because the money just isn’t there. Benefits packages really beefed up during the pandemic, but employers have grown wary about overspending and are pulling back on benefits like parental leave while preserving those that can be more directly linked to business growth, like learning and development.

Cushion the blow by giving your employees more flexibility “such that your employees have more choice about how they allocate what benefits are available to them,” said Tremmaglia. “What I really appreciated from my own company and from our customers is finding more diversified programs that are applicable to people, and then having the choice as an individual.”

At Northstar, Denton said they needed to roll back their backup childcare coverage, taking a phased approach to make the transition easier. “You need to warn people, you need to give them enough time so that if they are planning to use this benefit, they have adequate notice that you need to think about this differently,” she said.

Give them the courtesy of telling them why a particular benefit is being phased out. “If you take something back, a lot of people are going to be angry, and there’s no avoiding that,” Denton said. “But for a lot of people, if they understand the why, maybe they’ll be a little less angry.”

Despite recent contractions, mental health benefits have become a permanent fixture of total rewards packages. “Mental health benefits were one of the more underutilized programs prior to Covid. With Covid, we saw exponentially increased need,” said Walsh. “The increased need wasn’t necessarily a good story, but the increased awareness and participation? Absolutely. We put a lot of different programs in place focused on expanding our mental health benefits.” Benefits matter most when there’s a need, she noted.

Emily McCrary-Ruiz-Esparza is a freelance reporter and From Day One contributing editor who writes about the future of work, HR, recruiting, DEI, and women's experiences in the workplace. Her work has appeared in The Washington Post, Fast Company, Quartz at Work, Digiday’s Worklife, and Food Technology, among others.