Workforce expectations go beyond pay. Organizations must rethink rewards strategies to attract and retain talent while ensuring fairness and compliance. This guide explores why total rewards matter and how to adapt for future success.
Traditionally, rewards programs have been restricted to financial compensation provided to employees in return for their services. This is changing due to the evolving preferences and needs of today’s diverse workforce.
Today, people are not just looking for a well-paid job but also for purpose, relationships, flexibility, fairness and a personalized experience – along with career and learning opportunities. Because of this, to attract and retain top talent, organizations must re-evaluate their rewards strategies to ensure they reflect diverse expectations and promote equity and transparency.
How to support your reward transformation
Adapting total rewards is critical for talent retention and regulatory compliance. Leaders must balance competitiveness with fairness, leveraging data and global best practices to create value and foster engagement.
Here are the key aspects you should focus on to guide your organization through a meaningful total rewards transformation and help you adapt to the new workforce reality.
Organizations need job descriptions that go beyond task lists. They should capture evolving skills, reflect strategic contributions and support fair, transparent career structures that help employees understand their role, growth opportunities and long-term career paths.
A structured job evaluation framework is essential for equal pay and clarity. Companies must adopt methodologies that determine the real value of each role, strengthening fairness, enabling better performance and pay decisions and reinforcing trust.
At KPMG, our job evaluation methodology is a robust and structured tool designed to assess the relative worth of roles. It enables the creation of a transparent and equitable grading structure, ensuring consistency, fairness and a solid foundation for effective talent and reward decisions.
Competitive and compliant reward decisions rely on accurate market data. Regular benchmarking helps companies stay attractive, ensure pay equity, respond to shifting labor dynamics and meet the expectations of the Pay Transparency Directive.
The KPMG Luxembourg remuneration survey gives companies a clear view of where they stand in the market by enabling C level executives and HR professionals to compare their employees’ compensation against industry standards – across salary, fringe benefits, HR policy developments and more.
Employees expect rewards that balance pay with wellbeing, purpose and flexibility. Organizations should rethink salary, benefits and non‑financial offerings together, building reward packages that resonate across different employee groups and support long‑term retention.
Executive pay must reflect market realities while reinforcing responsible leadership. Companies should design compensation structures that align with long‑term value creation and support a high‑performance culture without compromising fairness and transparency.
Performance frameworks need to be tied to real business outcomes. Organizations should redesign KPIs around strategic priorities, using data and external benchmarking to ensure performance expectations are clear, measurable and meaningful for both leaders and employees.
Well-designed LTIPs help retain critical leaders by linking rewards to long-term business goals. Companies must navigate tax, regulatory and behavioral considerations to build plans that drive sustainable value and remain compliant.
Short‑term incentives should reinforce a genuine pay‑for‑performance culture. Organizations need transparent, market-aligned bonus and commission structures that support motivation, fairness, and regulatory expectations, while being tailored to business objectives.
With frameworks like CRD, UCITS, AIFMD, Solvency and the Pay Transparency Directive evolving, companies must ensure remuneration policies are aligned, well‑documented and grounded in objective grading and benchmarking to withstand scrutiny.
Rewards transformation requires more than design – it requires cultural adoption. Companies must help employees understand how their goals connect to organizational priorities and equip managers to communicate reward decisions confidently and transparently.
