Understanding Compensation, Benefits, and Growth Opportunities in Total Rewards

Did you know? Nearly 24% employees have either left or seriously considered leaving their jobs due to inadequate benefits in 2025, up from just 15% in 2024. 

For growing companies managing distributed teams with lean HR departments, this isn’t just a retention issue; it’s a strategic crisis. As CPOs and CFOs steer through rapid expansion, the real challenge isn’t just offering competitive salaries; it’s building a total rewards strategy that seamlessly combines compensation, benefits, and opportunities for personal growth.

This guide will show you how leading organizations are moving past outdated spreadsheets and creating data-driven compensation models that not only keep top talent but also stay within budget and drive long-term growth. 

At a Glance

• Total rewards = salary + benefits + growth opportunities. When you include health coverage, equity, retirement plans, and learning opportunities, a $100K salary feels like a $140K+ package. This is what keeps employees loyal.
• Employees leave due to poor benefits. It’s not just about salary—your total rewards package is the real reason people stay or go.
• Tailor your package to your company’s stage. Startups rely on equity, scale-ups balance cash and growth, and established companies focus on stability with strong benefits.
• Focus on the benefits that matter most. Health insurance, mental health support, retirement, flexible work, and family-friendly perks are key. You don’t need to have the biggest budget, just the benefits your team values.
• Growth opportunities drive loyalty. Clear career paths, learning budgets, and mentorship programs result in more internal promotions and lower hiring costs.
• Implementation is key. Regularly benchmark your pay, communicate the full value of total rewards, personalize benefits, and base compensation on performance rather than tenure.
• Transparency is crucial. Sharing salary ranges, promotion criteria, and your compensation philosophy helps employees understand where they stand and feel more secure.

What are Compensation, Benefits, and Growth Opportunities?

Your total rewards package is the full value you offer your employees. Today, compensation is the top factor job seekers consider when evaluating offers. But here's the catch: compensation is only one-third of the equation.

Compensation: The Foundation Layer

This is the direct money employees take home:

• Base salary: Fixed annual or hourly pay
• Variable pay: Performance-based bonuses, profit-sharing, or commissions
• Equity compensation: Stock options or RSUs (especially for growing companies)

For example, A SaaS company offers a $95K base salary, plus a 15% annual bonus and 0.05% equity. The total cash compensation is $109K, but that equity could be worth $50K+ at exit.

Benefits: The Safety Net

These are the non-wage perks that protect employees and their families:

• Healthcare (medical, dental, vision)
• Retirement plans with employer matching
• Paid time off and parental leave
• Wellness programs and mental health support

For example, an employee’s benefits cost $18K annually (healthcare $12K, 401k match $4K, and other benefits $2K). This is a value they'd struggle to replace on their own.

Growth Opportunities: The Future Multiplier

This is where real retention happens. Despite the clear demand for workplace training, most employees report receiving no workplace development. That’s a gap you can fill.

Growth opportunities include:

• Learning and development budgets
• Mentorship and coaching programs
• Clear promotion pathways
• Skill-building workshops and certifications

For example, an e-commerce company allocates $2K per employee annually for courses and certifications, along with quarterly career development talks. The result? 40% internal promotions versus the industry average of 12%.

Learn more about how AI is transforming the total rewards landscape.

When you communicate all three pillars together, a $100K salary transforms into a $140K+ total rewards package. That’s the difference between losing talent to competitors and building a strong, attractive employer brand.

Compensation Packages That Close Deals and Keep Talent

Now, let’s put it all together into compensation packages that actually work for different roles, stages, and business needs.

The Startup Package: Heavy on Equity, Light on Cash

When cash is tight but the potential is high, equity carries the weight.

• Base salary: 70-80% of market rate
• Equity: 0.1%-2% depending on role and stage
• Bonuses: Minimal or milestone-based (10% max)

Who it attracts: Risk-tolerant builders who want ownership and the upside potential. Not ideal for those needing immediate cash flow.

The Scale-Up Package: Balanced Growth Model

You’ve raised capital and need to hire fast. This package balances solid cash with meaningful equity.

• Base salary: 90-100% of market rate
• Equity: 0.05%-0.5% for mid-level, more for leadership
• Bonuses: 15-20% tied to performance metrics

Who it attracts: Experienced talent who want both stability and growth potential. These candidates have options and need both immediate value and future reward.

The Enterprise Package: Cash-Heavy, Stability-Focused

Established companies win on predictability, stability, and benefits depth, not equity lottery tickets.

• Base salary: 100-110% of market rate
• Annual bonus: 20-30% based on company and individual performance
• Stock grants or profit-sharing: Modest but consistent
• Premium benefits: Top-tier healthcare, generous PTO, retirement matching.

Who it attracts: Mid-to-late career professionals who prioritize stability, work-life balance, and comprehensive benefits over potential windfalls.

The Sales Package: Performance-Driven Compensation

Sales roles need clear visibility between effort and earnings.

• Base salary: 40-60% of total on-target earnings (OTE)
• Commission: 40-60% of OTE, uncapped or with accelerators
• Spiffs and bonuses: Quarterly incentives for specific wins

Who it attracts: Competitive, self-motivated sellers who want control over their earnings. High performers often out-earn their managers.

The Executive Package: Strategic Incentives at Scale

Leadership compensation is all about aligning with company outcomes, not just individual performance.

• Base salary: $200K-$500K+ depending on company size
• Annual bonus: 30-50% tied to company metrics (revenue, EBITDA, strategic goals)
• Long-term incentives: Multi-year equity grants or performance shares
• Perks: Car allowances, executive coaching, deferred compensation

Who it attracts: Proven leaders who expect compensation reflecting their impact on company valuation and growth trajectory.

The Hybrid/Remote Package: Location Flexibility Built In

Remote-first companies need compensation that works across geographies without creating internal inequity.

• Location-adjusted: Pay market rate for each employee’s location
• Location-agnostic: Pay everyone the same, benchmarked to a high-cost market

Who it attracts: Remote employees who value flexibility without sacrificing compensation equity.

Match the package to the person and the moment, and you’ll close more offers while staying within budget. While compensation gets candidates in the door. Benefits keep them from walking out.

Benefits That Actually Matter to Your Employees

Offering the right benefits doesn't have to break your budget. In fact, by focusing on what truly matters to your employees, you can build loyalty and boost retention. 

Let’s break down the benefits that really make a difference and how you can implement them without stretching your resources: 

Health Insurance: The Non-Negotiable Foundation

Employees expect comprehensive health coverage—this is table stakes.

• Core coverage: Medical, dental, and vision insurance
• Smart move: Offer tiered plans, high-deductible for healthy employees, PPOs for those with ongoing medical needs.

Mental Health and Wellness: The Rising Priority

Mental health benefits are now essential.

• What to offer: Employee Assistance Programs (EAPs), therapy session coverage, wellness app subscriptions, gym memberships
• Impact: Companies offering mental health support see 12% higher retention and lower absenteeism.

Retirement Plans: Building Long-Term Security

401(k) plans with matching contributions are key to retention.

• Structure: 401(k) with 3-6% employer match
• Cost: Employers contribute $3,000 for a $100K employee who contributes 6%.

ROI: Companies with retirement plans see 13% lower turnover.

Paid Time Off: Rest Isn't Optional

PTO prevents burnout and turnover.

• Standard structures: 10-15 days PTO, increasing with tenure; unlimited PTO can backfire.
• What works: Minimum required PTO (e.g., 15 days) with unlimited upside.

Add-ons: Paid holidays, sick leave, parental leave.

Flexible Work Arrangements: The New Standard

Remote and hybrid work are now expectations.

What to offer: Remote work, home office stipends, coworking memberships, flexible hours

Life and Disability Insurance: Protecting What Matters

Affordable peace of mind for employees with families.

Coverage: Life insurance (1-2x salary), short-term and long-term disability

Family-Friendly Benefits: Support the Whole Person

Support employees with families, and they’ll stay loyal.

High-impact options: Childcare stipends, backup childcare, fertility treatment coverage, adoption assistance

The best benefits packages are about offering what your employees value most. Survey your team, understand their needs, and allocate your budget accordingly.

Since different employees value different benefits, this is the perfect place to add a link to our guide on creating a total rewards strategy for a multigenerational workforce.

However, compensation and benefits are essential, but employees leave when they hit a dead end.

Growth Opportunities That Turn Employees Into Lifers

Growth opportunities are the highest-ROI investment you can make in retention. Here are what you can offer to your employees:

Career Pathing: Show Them the Roadmap

Employees need clear advancement paths. Without them, top talent leaves within 18 months.

• What to offer: Documented career ladders, clear promotion requirements, timeline expectations (2-3 years), and multiple tracks (individual vs. management).
• Result: 40% internal promotions, compared to the industry average of 12%.

Learning and Development Budgets: Fuel Continuous Growth

Employees with learning budgets are more likely to stay.

• What it covers: Courses, certifications, industry conferences, and executive coaching.
• Tip: Use-it-or-lose-it policies drive 78% utilization.

Mentorship and Coaching Programs: Personalized Guidance

Structured mentorship improves retention and accelerates productivity.

• Internal mentorship: Pair juniors with seniors for 1-on-1s.
• External coaching: Bring in professional coaches for high-potential employees.
• Impact: Companies with mentorship programs see 23% higher retention.

Internal Mobility Programs: Build Before You Buy

Promoting internally saves 1.7x more than hiring externally.

What to offer: Post open roles internally, allow lateral moves, and create rotational programs.

Skills Training and Upskilling: Close the Gap

Keep your team’s skills aligned with business needs.

• High-impact areas: Technical skills, leadership development, communication, cross-functional knowledge.
• Delivery: Lunch-and-learns, workshops, bootcamps, and online courses.

Leadership Development Programs: Build Your Bench

Invest in leadership skills to improve team performance.

• What to include: Boot camps for new managers, ongoing leadership training, and executive coaching.
• Why it matters: Great managers drive 70% of employee engagement.

Conference and Event Attendance: Expand Networks and Ideas

Conferences boost learning and expand professional networks.

• What to fund: Industry conferences, networking events, speaking opportunities.
• Requirement: Employees share takeaways with their team to multiply the ROI.

Succession Planning: Prepare for What's Next

Create opportunities for ambitious employees to step into leadership roles.

How it works: Identify critical roles and successors, then develop them through coaching and stretch assignments.

Performance Reviews Tied to Growth: Make Development Formal

Integrate growth into your performance reviews.

What to include: Skills assessment, development goals, resource needs, and career progression discussions.

For a deeper look at how growth opportunities connect to the broader employee experience, explore our article on enhancing employee experience through total rewards strategies.

Investing in growth opportunities costs less than you think and has a 30-45x ROI. Companies winning the talent pool aren’t paying the most; they’re growing people the fastest. Read on to get a few tips on how to implement your reward policy effectively. 

How to Make Your Total Rewards Strategy Actually Work

A great total rewards strategy can only work if it's communicated clearly, benchmarked consistently, and tailored to your team’s evolving needs. Here’s how to implement it effectively without wasting budget or losing talent:

• Benchmark Religiously, Adjust Strategically: Benchmark compensation twice a year using multiple sources. Segment by role, level, and location, and aim for the 50th–75th percentile to stay competitive.
• Communicate Clearly: Send total rewards statements annually, before performance reviews, so employees can see the full value of their compensation. Use software like CandorIQ to generate these statements automatically and distribute them via email or an employee portal.
• Personalize vs. Standardize: Offer flexible benefits (cafeteria plans, FSAs, choose-your-own L&D budgets). Create a “cafeteria-style” benefits selection tool where employees can choose benefits that matter most to them, and set guidelines for which benefits are standardized to avoid chaos.
• Tie Compensation to Performance: Shift from tenure-based raises to performance-driven compensation. Use a performance management platform like CandorIQ to document and track employee performance quarterly. This will provide a clear link between performance and compensation during review periods.
• Survey Employees and Act: Use anonymous surveys to collect honest feedback. Then, implement changes to benefits based on the results, like increasing mental health support if it's a frequent request, and communicate the updates to employees.
• Automate Administration, Humanize Communication: Choose an HR platform that integrates with other systems and automates repetitive tasks. Use this time saved to have one-on-one meetings with high-potential employees to discuss their career growth.
• Build Transparency: Make your compensation philosophy, salary bands, promotion criteria, and equity guidelines available internally. Post salary bands for each role and level in your internal portal or employee handbook, so employees understand where they stand within the structure and what they need to achieve to progress.
• Address Pay Equity: Use data analytics tools to run these audits and automatically flag any discrepancies. Have a clear remediation plan in place to address any issues quickly and effectively.
• Link Growth to Outcomes: After each training or learning opportunity, track performance improvements and retention rates. Share the ROI with leadership to reinforce the value of investing in growth.
• Recognize and Reward: Set up a recognition program with monthly and quarterly awards. Use a platform like Slack or Teams to celebrate wins and provide “Employee of the Month” perks, such as a small gift card or an extra day off.

If you're thinking about how to structure your team for scale, our guide on building an effective total rewards team structure walks through common models and when to use each one.

The best total rewards strategies are clear, consistent, and continuously improved. You don’t need to outspend competitors—you need to out-communicate and out-execute them.

Conclusion

Building a total rewards strategy that retains talent is about offering what matters most and communicating it consistently. Compensation gets employees in the door. Benefits keep them secure. Growth opportunities give them a reason to stay. Together, they turn a $100K salary into a $140K+ value proposition that competitors can’t easily match.

The challenge? Many growing companies still rely on outdated spreadsheets and manual processes that waste time and lead to costly mistakes.

If you're scaling quickly with limited HR resources, you need systems that work as hard as your team. CandorIQ helps companies build data-driven compensation strategies, automate communications, and eliminate spreadsheet chaos. See how in a quick demo.

Frequently Asked Questions

1. Should we offer unlimited PTO or a traditional accrual system?

Traditional accrual is safer. Unlimited PTO can backfire, with employees taking less time off. If you offer it, set minimum requirements (e.g., 15 days).

2. How do we determine which benefits employees actually value?

Survey employees annually and track benefits utilization. Reallocate the budget based on what’s most used (e.g., mental health support vs. gym memberships).

3. What's more cost-effective: hiring externally or promoting internally?

Promoting internally costs 1.7x less than external hires and reduces ramp-up time. Aim for 70% internal promotions, 30% external for senior roles.

4. How often should we review and adjust our compensation strategy?

Benchmark compensation twice a year and conduct annual total rewards audits. Adjust immediately if you're losing candidates to competitors.

5. Do we need to match competitor benefits exactly to stay competitive?

No. Focus on the overall value, not line-item matching. Offset differences with other strong benefits, like retirement matching or growth opportunities.