10 min read •
As a Chief People Officer, you’re facing a challenge that keeps getting harder: how do you attract, retain, and motivate top talent in a market where everyone is competing for the same people?
The answer isn’t just higher salaries. It’s not even better benefits. It’s something more strategic: a comprehensive total rewards strategy that makes employees feel valued, invested in, and genuinely excited about their future with your company.
But here’s the problem: most companies think they have a total rewards strategy when they actually just have a disconnected collection of benefits. This guide will show you the difference – and how to build something that actually moves the needle.
What Total Rewards Actually Means (And Why Most Companies Get It Wrong)
Total rewards isn’t just your benefits package with a fancy name. It’s a strategic framework that encompasses everything employees receive in exchange for their time, talent, and commitment.
A true total rewards strategy has five interconnected pillars:
1. Compensation
Base salary, variable pay, bonuses, commissions – the direct financial rewards for work performed.
2. Benefits
Health insurance, retirement programs, paid time off, life insurance – the safety net that protects employees and their families.
3. Well-Being
Financial wellness programs, mental health support, work-life balance initiatives, flexible work arrangements – everything that supports employee health and happiness.
4. Performance & Recognition
Performance incentives (LTIP/STIP), spot bonuses, peer recognition programs, awards – the ways you acknowledge and reward excellence.
5. Development & Career
Learning opportunities, career advancement paths, mentorship programs, skill development – the investment in their future.
The mistake most companies make? They focus 90% of their energy on pillar #1 (compensation) and treat everything else as an afterthought. Then they wonder why employees still leave for competitors offering just 10% more in salary.
You can’t out-salary the tech giants or the oil companies. But you can out-strategy them. A well-designed total rewards program makes your company competitive even when your base salaries aren’t the highest in the market. It’s about creating value that goes beyond the paycheck.
Why Total Rewards Matter More Than Ever in Saudi Arabia
The Saudi job market is transforming faster than ever. Here’s why a strategic total rewards approach is critical right now:
1. The War for Saudi Talent Is Intensifying
With Saudization targets and Vision 2030 initiatives, companies are competing fiercely for qualified Saudi nationals. Base salary alone won’t differentiate you – but a compelling total rewards package will.
2. Employee Expectations Are Rising
The next generation entering the workforce doesn’t just want a job – they want growth, purpose, flexibility, and financial security. They’re evaluating your entire value proposition, not just the number on their offer letter.
3. Economic Diversification Creates Opportunities
As Saudi Arabia moves beyond oil, new sectors are emerging with different compensation philosophies. Companies that innovate with total rewards will attract talent from established industries.
4. Financial Literacy Is a Strategic Advantage
Many employees don’t understand the full value of what they receive. A strong total rewards strategy includes communication and education – helping employees see and appreciate their complete compensation.
Building Blocks: The Essential Components for Saudi Companies
Let’s get practical. Here’s what a competitive total rewards program looks like for a mid-to-large company in Saudi Arabia:
Foundation Tier: The Non-Negotiables
Compensation:
• Market-competitive base salary
• Transparent salary bands by role and level
• Clear criteria for raises and promotions
Benefits:
• Comprehensive health insurance (employee + dependents)
• End-of-service benefits (EOSB) management
• Paid time off (vacation, sick days, religious holidays)
• Life and disability insurance
These are table stakes. Every company needs them just to be in the game.
Differentiation Tier: What Makes You Competitive
Financial Wellness:
• Employee Savings Programs with company matching (3-10% of salary)
• Financial literacy workshops and one-on-one counseling
• Emergency fund access programs
• Investment education and planning tools
Performance Incentives:
• Short-term incentive plans (STIP) for quarterly/annual goals
• Long-term incentive plans (LTIP) for sustained performance and retention
• Spot bonuses for exceptional contributions
• Team-based incentives for collaborative goals
Enhanced EOSB Programs:
• Investment-backed EOSB with visible growth tracking
• Enhanced payouts for long-term service milestones
• Digital dashboards showing real-time balance
Work-Life Balance:
• Flexible work arrangements (hybrid/remote options)
• Extended parental leave
• Sabbatical programs for long-tenured employees
• Wellness days and mental health support
This tier is where you start winning talent wars.
Excellence Tier: What Makes You an Employer of Choice
Career Development:
• Structured career paths with clear milestones
• Annual professional development budgets (10K-30K SAR per employee)
• Executive coaching and mentorship programs
• Tuition reimbursement for relevant degrees/certifications
• Internal mobility programs and job rotation
Recognition & Culture:
• Peer-to-peer recognition platforms
• Annual awards with meaningful prizes
• Profit-sharing programs
• Equity/ownership opportunities for senior leaders
Lifestyle Benefits:
• Gym memberships and wellness stipends
• Commuter benefits and transportation allowances
• Family support programs (childcare assistance, education support)
• Travel and experience rewards
This tier makes people brag about working for you.
The Communication Challenge: Making Invisible Value Visible
Here’s a problem every CPO faces: you’re already offering more than employees realize.
Let’s say you have an employee earning 120,000 SAR annually. Here’s what they’re actually receiving:
What the employee sees:
Base Salary: 120,000 SAR
What they’re actually getting:
• Base Salary: 120,000 SAR
• Health Insurance (family): 18,000 SAR
• Company match on savings (5%): 6,000 SAR
• EOSB annual accrual + returns: 12,500 SAR
• Performance bonus potential (10%): 12,000 SAR
• Professional development budget: 15,000 SAR
• Life insurance: 3,000 SAR
• Additional leave days value: 4,500 SAR
• Remote work flexibility value: 8,000 SAR
Total Annual Value: 199,000 SAR
That’s 66% more than what they think they’re earning.
The solution? Total rewards statements. Annual (or even quarterly) documents that break down every single component of compensation and its value. When employees see the real number, two things happen:
- They feel more valued and appreciated
- They’re less likely to leave for a marginally higher salary elsewhere
“After we started sharing total rewards statements, we saw a 23% reduction in employees leaving for ‘better compensation.’ They didn’t realize how much they were already getting until we showed them the full picture.”
– CPO, Saudi Financial Services Company
Building Your Total Rewards Strategy: The CPO’s Playbook
Ready to build (or rebuild) your total rewards strategy? Follow this framework:
Phase 1: Assess & Benchmark (Months 1-2)
- Audit your current offerings. Document everything you provide across all five pillars.
- Calculate total value. Assign monetary values to every benefit and program.
- Survey employees. What do they value most? What’s missing? What would make them stay?
- Benchmark competitors. Research what 5-10 companies in your industry and region offer.
- Analyze turnover data. Why are people really leaving? What patterns emerge?
Phase 2: Design & Prioritize (Month 3)
- Define your philosophy. What kind of employer do you want to be? What values drive your rewards?
- Identify gaps. Where are you falling short compared to competitors and employee expectations?
- Prioritize investments. Which programs will deliver the highest ROI? Start there.
- Build business cases. Calculate costs vs. expected returns for each major initiative.
- Create roadmap. Phase implementation over 12-24 months.
Phase 3: Implement & Launch (Months 4-12)
- Start with quick wins. Launch 1-2 high-impact programs first (employee savings programs are excellent starts).
- Choose technology partners. Find platforms that automate administration and provide employee visibility.
- Train managers. They need to understand and articulate the full value proposition.
- Launch with fanfare. Big company-wide announcements, educational sessions, excitement.
- Create communications plan. Regular reminders about available programs and their value.
Phase 4: Measure & Optimize (Ongoing)
- Track key metrics. Participation rates, satisfaction scores, turnover, cost per hire, time to fill.
- Calculate ROI. Are the programs delivering the expected business outcomes?
- Gather feedback continuously. Pulse surveys, focus groups, stay interviews.
- Iterate and improve. Double down on what works, fix what doesn’t.
- Communicate wins. Share success stories and program impact regularly.
Focus 80% of your initial effort on these three high-impact programs: (1) Employee savings programs with company matching, (2) Performance incentives (STIP/LTIP), and (3) Visible EOSB management. These three deliver outsized returns on investment and are relatively easy to implement. Add other programs as you build momentum.
The Business Case: What This Delivers
When you present your total rewards strategy to the C-suite, they’ll want to know: what’s the return?
Here’s what comprehensive total rewards programs consistently deliver:
Talent Attraction:
• 30-40% increase in qualified applicants
• 25% reduction in time-to-hire
• Higher acceptance rates on offers (80%+ vs. 60-65% industry average)
Retention & Engagement:
• 20-35% reduction in turnover
• 40-50% improvement in employee engagement scores
• 25% increase in internal promotion rates
Performance & Productivity:
• 10-15% increase in productivity metrics
• 20% improvement in goal achievement rates
• Higher quality of work and innovation
Financial Impact:
• 3-5X ROI on program investments
• Millions in turnover cost savings
• Stronger employer brand reducing recruitment costs
Common Pitfalls to Avoid
As you build your strategy, watch out for these mistakes:
1. Launching Too Much at Once
Employees get overwhelmed, programs get poorly executed, and nothing gets the attention it deserves. Phase your rollout.
2. Poor Communication
Building great programs but failing to communicate their value is like throwing a party and forgetting to invite anyone. Over-communicate.
3. One-Size-Fits-All Approach
Different employee segments value different things. Offer flexibility and choice where possible.
4. Forgetting Administration
Complex programs that require tons of manual work will fail. Invest in technology that automates and scales.
5. Not Measuring Impact
If you can’t prove ROI, you’ll lose budget and credibility. Build measurement into everything from day one.
The Bottom Line for CPOs
Your role isn’t just to manage people – it’s to build competitive advantage through people. A strategic total rewards program is one of the most powerful tools in your arsenal.
The companies that will win the talent wars in Saudi Arabia over the next decade won’t be the ones with the deepest pockets. They’ll be the ones with the smartest strategies – the ones that understand how to create value beyond salary, communicate that value effectively, and build cultures where people genuinely want to stay and grow.
Your competitors are reading this too. The question is: who will execute first?
Build Your Total Rewards Strategy
Let’s design a comprehensive total rewards program that drives retention, engagement, and business results. Schedule a strategic consultation for CPOs and people leaders.
About ThriftPlan: We help Saudi companies reduce turnover and boost performance through smart employee benefits programs. Book a free demo or reach out at wecare@thriftplan.sa.
