Opinion

By Mark A. Lema, MHR, SPHR, SHRM-SCP.

Perhaps it’s time to ask a difficult question: Does our traditional, one-size-fits-all total compensation model still work for today’s workforce?

For years, employers competed for talent by offering robust benefit packages—affordable healthcare, paid or unpaid time off, retirement plans, annual bonuses, holiday parties, and other perks. These elements are once defined as “great employers,” especially for new graduates entering the workforce.

Today, that landscape has shifted. Increasingly, new graduates and early-career professionals focus first, and sometimes exclusively, on pay. Conversations among peers center on hourly rates and salaries, not benefit offerings. Even when substantial benefits exist, compensation often becomes the deciding factor. This raises an important question: Are our current attraction and retention strategies aligned with the priorities of today’s early-career workforce?

Many younger workers—though not all—appear to be seeking immediate financial stability rather than long-term employment relationships. With the expectation of shorter tenures and frequent job changes, do front-loaded retention incentives truly deliver a return on investment? Or are employers investing heavily in benefits that new hires neither fully value nor plan to use?

This suggests the need for an alternative model: high pay for defined contribution. Under this approach, employees are compensated at a premium rate in exchange for meeting clear performance and scheduling expectations—similar to a contractor relationship.

For example, let’s say

• An employee is hired at $25 per hour (ob rate).
• If the employee works all scheduled hours in a week, they earn a 25% premium on those hours.
• If they meet all scheduled hours over a quarter, they receive an additional financial incentive.

This structure allows benefits dollars to be redistributed toward direct compensation for those who prioritize cash over traditional perks. It also promotes self-management, placing greater ownership of financial stability and career decisions in the employee’s hands.

Such models already exist in sectors like healthcare, where “flex” or “floater” roles offer higher hourly pay without PTO, healthcare, retirement plans, or guaranteed annual increases. Employers still define expectations and standards, but the employment relationship is simplified and transactional.

For many seasoned professionals, this shift may feel uncomfortable. Loyalty, stability, and long-term growth once defined career success. Yet today’s workforce is more diverse in expectations, and perhaps the future lies not in replacing traditional employment models but in offering multiple paths, allowing individuals to choose the structure that best fits their priorities.

I’d love to hear your perspective, especially from young adults and those just beginning their careers. Your experiences and insights are invaluable, and I look forward to an open and thoughtful discussion in the comments.