If there was a truism about HR today, it’s that employers seek out any edge they can find for attracting, landing and keeping talent.

Successfully managing talent goes beyond compensation, as many have already reported. Employers today need to offer a wider range of benefit choices tailored to each generation’s needs, a strategy that can become an important differentiator in the talent wars, according to Craig Dolezal, senior vice president, Aon.

So what can employers do to ensure they are offering a competitive range of benefits that help attract and retain the best talent?

One model that could become a powerful vehicle for achieving both these aims is what Dolezal calls “a total rewards exchange.” The concept: An employee gets to create their own benefits package, prioritizing compensation, bonuses, time off, medical, dental, wellness and childcare among other rewards.

Essentially, it’s akin to creating “a marketplace where people can make their own decisions about how they want to be compensated,” Doelzal says. “Whether they want life insurance at this level or they’d rather have it in a sabbatical. It’s up to them to decide.”

With workplaces evolving, and not always in ways that support business goals, employee trust in employers is at an all-time low, according to the Aon Workforce Mindset Study. Additionally, the study found, one-third of employees are seeking to change jobs in the next year.

With populations aging and the pool of local, fresh talent becoming relatively stagnant, employers can’t afford to ignore these realities.

Private health exchanges: an early model

Modeled after private health exchanges, a growing trend (with both supporters and critics), the total rewards exchange arrangement can appeal to prospective employees who desire greater individual control over their benefit options and care choices, Dolezal says.

In addition, Aon’s Workforce Mindset Study found that employees also seek more honesty and transparency from leaders, which ranked as their number one desire. Consistent with other aspects of their life, they expect to be able to access information on their benefits when and where they want, he says.

Mike Christie, senior vice president, Exchange Market Strategy at Aon, believes health exchanges are a significant step in this direction. Private health exchanges are competitive marketplaces where consumers can efficiently shop across multiple products often from multiple providers. They combine cost-accountability with meaningful control over health benefits for individual employees, Christie says. They also arm employees with information to make smarter choices based on their health needs, and tools to evaluate their options.

“What the health exchange does is in a very overt way show employees what the employer contribution allows you to purchase,” Christie says, so it brings more cost transparency about what the company’s contribution provides them.

Time to rethink benefit strategies

Employers offering benefits that employees crave is only part of the challenge, Dolezal says. Employers should also consider using a more consumer-driven benefits approach to encourage people to make smarter choices not only about health, but also about supplemental benefits and retirement products that they need to prepare and protect themselves and their families for the future.

For example, strong retirement packages might have greater appeal to people in their 60s than to people in their teens. A working parent might prioritize child-care, while someone just beginning their career could be interested in tuition reimbursement. For many, a balance of reward options is a precondition for employment, Dolezal says, and as the battle for talent becomes continues to heat up, perks such as travel vouchers and even free lunches could become differentiators.

What does the future hold?

At a time when skills shortages are on the increase worldwide, and workforce demographics are changing, 70% of employers say they plan to revise their total rewards strategy to accommodate their workforces’ changing needs and demographics in the next five years, according to the Aon 2015 Health Care Survey.

Dolezal says applying the health exchange approach to employee benefits could prove a valuable model for rethinking how to administer these benefits. It can “take away a lot of the corporate decision making employers have to do when trying to choose the right plans,” he adds, allowing employers to focus their energies on value creation rather than administrative functions. Employers can also find significant cost savings through this model because of the reduced in-house administrative burden.

By expanding this approach beyond healthcare to a fully flexible benefits offering, organizations can offer a rewards package that meets the needs of employees as individuals, rather than attempting a one-size-fits-all approach.

“We believe it will be the next wave of innovation in benefits,” Dolezal says, “exchanges moving beyond healthcare to total rewards marketplaces.”