Total Compensation Statements Help Employers Recruit and Retain Top Talent
A recent article in Employee Benefit News notes that U.S. companies continue to be cautious when it comes to handing out raises and bonuses. But in today’s environment of historically low unemployment, employers still need to compete in order to recruit and retain top talent. One tactic they are embracing is improving their benefits offerings. Unfortunately for employers, these investments aren’t always readily visible to employees.
Making sure that employees are aware of enhancements to their benefits packages is critical. So is making sure they understand the value of their benefits.
Communicating about total compensation is especially important in today’s tight labor market. Employees who don’t understand the value of their total compensation are more likely to leave for a competitor paying a bit more – even if that competitor offers fewer benefits. For employers struggling to fill job openings, as well as trying to reduce the cost of employee turnover, it’s a challenging situation.
What can employers do to change the dynamic? Distributing total compensation statements is an excellent place to start.
Importance of Total Compensation Statements
Employees generally have a good grasp of their base pay and other cash compensation. But many individuals lose sight of the range of employer-provided benefits and perks. For an employer, what’s the value of a benefits package that employees don’t fully understand or appreciate?
Well-designed total compensation statements help close this knowledge gap. Showing employees the value of their total rewards – the combination of their benefits and cash compensation – helps maximize the return on an organization’s investment in human capital.
What Should Employers Include in a Total Compensation Statement?
Include all the elements of your organization’s pay and benefits in your total compensation statement. Some of the more obvious elements include:
- Base pay, bonus and incentive payments
- Medical, dental and vision coverage
- 401(k) and/or other retirement benefits
- Life and disability insurance, along with other income protection benefits
- Paid Time Off
- Continuing education and professional development
In addition to the core elements of compensation and benefits, a total compensation statement can showcase programs that sometimes go unnoticed. Here are just a few examples of perks and benefits that are sometimes overlooked:
- Emergency backup childcare
- Wellness programs
- Onsite health clinics and fitness facilities
- Employee discount programs
- Company provided meals
Employers can highlight these and other benefits in a total compensation statement and make sure they are part of the organization’s unique total rewards story.
Revealing the Hidden Paycheck
On average, benefits make up around one-third of a typical employee’s total compensation. Unfortunately, the significant investment made in employee benefits often has less impact than an employer expects simply because employees lack an understanding and appreciation of those benefits. Distributing total compensation statements is an efficient and cost-effective way for an organization to communicate its total rewards story to its workforce.
Here at RewardsFocus we are dedicated to helping employers maximize ROI on the investment in total compensation. Contact us today to learn more about how we can you tell your employees the real story of your investment in them.