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Total Rewards: 2023 Compensation and Benefits Trends

Total Rewards continues to be a hot-button topic. The shifting landscape of talent acquisition and retention, coupled with economic strife and uncertainty, has placed Total Rewards at the center of hiring conversations in companies of all sizes. Participating in this conversation means understanding what, specifically, talent is looking for and how a company is prepared to meet these expectations.

Let’s take a closer look at Total Rewards trends: both headline trends of 2022 and those companies can expect to see in 2023 as the conversation continues.

Market influencers affecting Total Rewards strategies

Today’s labor market is one filled with both burnout and economic uncertainty. Employees expect their organizations to go beyond the norm and care for their entire person through compensation and benefits.

Inflation is a critical issue heading into 2023. As workers tighten their budgets amid cost-of-living increases, they’re looking for positions that will meet their needs with more robust wages and benefits packages.

Market trends that emerged during the pandemic are still important moving forward too. Employee satisfaction is largely tied to flexibility in hybrid or work-from-home accommodations, efforts to reduce workplace burnout, and benefits that prioritize wellness.

Total Rewards packages that meet these growing needs will be a primary driver for recruitment in 2023. To attract and retain the best talent, employers must meet employees where they are with regard to these trends.

Top Total Rewards trends that will influence 2023 recruitment

Some of the biggest Total Rewards trends from 2022 will likely stick around through 2023. Organizations would do well to adjust their compensation and benefits packages according to trends from this year:

  • Location-based salary changes. With work-from-home options more robust than ever, organizations may have team members in different geographical locations. But a dollar may not go as far in San Diego as it would in Detroit. Companies have begun adjusting their pay scales to coincide with the cost of living for each remote employee’s location.
  • Work-from-home stipends. Employees on a hybrid or work-from-home model may run into extra costs for internet, office supplies, and equipment. Company stipends or reimbursements to offset these expenses can add further appeal when offering a flexible workplace to candidates.
  • Caregiver benefits. Many parents and elder caregivers have struggled to balance work with the ever-increasing costs and time for care. Better caregiver benefits may include stipends for caregiving, flexible paid time off (PTO) or scheduling, and employee assistance programs.
  • Mental health and wellness benefits. Work-related burnout and mental health challenges have taken their toll on employees, reducing productivity, and driving some people out of work entirely. Mental wellness benefits are key in retaining valued staff. These might include on-site therapists, wellness workshops, and flexible health and wellness stipends.

Total Rewards can be a competitive advantage

Today’s job seekers want more from their current or potential employers. Total Rewards goes far beyond a paycheck, and market influencers are driving what employees expect. Companies capable of meeting those expectations are more likely to engage with valuable, highly qualified candidates.

Total Rewards encompasses a vast range of incentives and requires a dedicated team that can orchestrate and administer your strategy. Make sure your Total Rewards team is apprised of industry trends and changes to continue attracting top talent.

Total Rewards shouldn’t be a topic that causes concern for a company. Instead, it needs to be a conversation hiring managers are excited to have — because they know it’s a competitive advantage in attracting and retaining talent. If your Total Rewards package doesn’t feel like a competitive advantage, it might be time to hire HR professionals who can retool it to be one.

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