Healthcare's labor market has never been more challenging. Thoughtful investment in a total rewards strategy is an often overlooked, underutilized way to address your workforce engagement and retention issues.

We're all familiar with today's healthcare challenges. Persistent labor shortages, rising inflation and narrowing margins are crippling health systems' best efforts to maintain a healthy and engaged workforce. Traditional tactics like spot bonuses and continually increasing compensation aren't sustainable. But we keep doing them to meet the needs of the present moment. Who has time to step back and think strategically about employee benefits?

We get it. Strategic planning may feel like a luxury during urgent blocking and tackling. But we see an untapped approach that can significantly improve workforce engagement and retention: a data-driven, employee-centered total rewards strategy.

What is a total rewards strategy?

Healthcare's continued focus on pay incentives over total wellbeing1

83% of healthcare organizations report enhancing base salary as part of total rewards.

50% report enhancing variable compensation or bonus programs.

Yet only 28% of respondents have a comprehensive strategy focused on whole-employee health.

Total rewards packages balance the value of employee compensation with the value of their personal work experience. It goes beyond compensation to account for benefits, flexibility, performance recognition and education and career development opportunities. In short, it's a holistic approach to caring for your employees.

An effective total rewards strategy has the power to drive higher workforce satisfaction, increase productivity, and decrease turnover. Total rewards sweeten standard compensation and benefits packages with employee-friendly considerations like work-life balance, remote work and opportunities to grow at the organization. Best yet, it offers a long-term solution to our most immediate workforce challenges. One-off perks won't sway a candidate to join your team or convince a disengaged employee to stay. But a thoughtfully designed, data-driven total rewards package can swing the odds in your favor. Simply put: it's hard to leave a great benefits package.

What are total rewards? They're not just increases to base salary. That's not the default for everything, and it's not sustainable. In order to meet the needs of today's workforce, healthcare leaders need to develop and tailor a culture where their people not only want to stay, but thrive.
– A Gallagher Health HR and Benefits Senior Consultant

So how do you implement a total rewards strategy?

An effective total rewards strategy starts with data. In a limited-resource environment, you need to know which benefits your employees value most — and start there. Here's your cheat sheet for getting started:

  • Ask your employees for feedback. You can get feedback through a brief benefits preference survey. Surveying your workforce helps avoid the common pitfall of making inaccurate assumptions about which benefits your employees care about most.
  • Analyze your data. What's most important to them? PTO, remote flexibility, 401k vesting — your data will tell you how to best meet the needs of your unique organization.
  • Adjust your benefits package accordingly. Tailor your total rewards package to highlight the benefits that mean the most to your workforce. When possible, offer your employees a portfolio of options and solutions. A diverse workforce requires a diverse and flexible total rewards package.

Solutions for healthcare providers and organizations

Align total rewards strategies for an evolving workforce to attract, retain and engage talent.


But here's the key to successful implementation: you must be prepared to act on your data.

Soliciting feedback from your employees about what they do and don't like can be a vulnerable — but incredibly powerful — tool for creating trust. Before engaging your workforce, your leadership team must commit to following through on what you learn. Without action, this process creates distrust and resentment. Done well, it fosters a culture of trust, transparency and engagement. You can also set expectations: you may not be able to do everything at once, but it's important that you hear from your teams.

Convinced? Here's a thought exercise: what is one practical step you can take right now to move your organization toward a robust total reward strategy?

The Health Management Academy

The Health Management Academy (The Academy) powers our community to drive health forward. Our community is made up of healthcare's most influential change makers including executives from the top 150 U.S. health systems and the most innovative industry partners. We power our members by building our community and fostering connections through executive peer learning. We support professional growth through talent and development. We accelerate understanding by delivering timely and actionable data and insights on key challenges. And we catalyze transformation by building alliances in areas where the power of the collective is greater than the power of one. More information is available at

The Academy extends its appreciation to Gallagher for their sponsorship of this article.


1"2022 Benefits Strategy & Benchmarking Survey," Gallagher, 2022.