Need more engaged employees? Implement Total Compensation Statements
The purpose of a total compensation statement is to show employees the total value of their rewards package. It includes personalized data that goes into detail not just about compensation but also benefits, incentives and how much the employer is contributing. Plus, these statements can also be used to reinforce the communication of less tangible benefits like work-life programs.
Top Advantages to Total Compensation Statements
1. Employees stay up to date on benefits
Outside of open enrollment, employees don’t often take the time to look over their entire benefits package. Total compensation statements display benefits that the employee is currently enrolled in and the additional benefits they have access to all year-long.
2. Showcases employer investment
Many employees don’t know or don’t often consider how much their employer actually contributes to their compensation and benefits. Next to direct pay, benefits costs represent the second largest payroll expense. So, it’s imperative that employees understand just how much the company is truly investing in them.
3. Empowers employees
The information that resides within a total compensation can empower employees when they can clearly see how they can better themselves financially and health wise. For example, an employee could see on their statement that they are not taking advantage of the 401(k) company match and decide to start contributing. Plus, when employees are empowered, they are more motivated. This can result in higher productivity and retention rates within your company.
4. Employee + family appreciation
Total compensation statements can spark a great conversation at home. It gives the employee’s family a chance to see the investment the organization is making. It will give everyone good insight and appreciation for what the employer is offering employees and their families.
5. Reduce administration costs
These total compensation statements are a self-service tool. Employees can refer back to the statements to answer questions they may have regarding their compensation and benefits. This can result in fewer calls and emails to HR, which means the HR team can in turn focus on more strategic initiatives.
What Does a Total Compensation Statement look like?
There are two types of statements you can produce: print and online statements. A print statement is printed and delivered to employees typically in one of two ways:
- 1. Mailed directly to an employee’s home address - This is a great option if you want to ensure the employee’s family gets a chance to view the statement.
- 2. Mailed to the employee’s manager to hand out directly at work - This option can start a meaningful conversation between the manager and employee about compensation, how valued the employee is and their future at the company.
Online statements are accessible via an internet browser or within platforms like PlanSource. These provide a great viewing experience for employees no matter the screen size. They are dynamic and interactive. Plus, you get access to the engagement analytics to see how employees are interacting with the statements. You can update and refresh the data a lot easier than you can a print statement and you don’t have to worry about the hassle of printing and mailing.
What to include on your statement
There is a lot of information to consider adding to a statement. As a general rule of thumb, I like to say – if it benefits the employee, include it! The general make up of a statement includes the following:
- Compensation data like base pay, bonus, commission and overtime
- Time off benefits like holidays, personal leave, vacation, maternity/paternity, jury leave
- Insurance benefits like medical, dental, vision, FSA, HSA
- Financial information like stock ownership, 401k, Medicare, social security, federal unemployment
- Additional benefits like tuition reimbursement, adoption assistance, parking, childcare, pet insurance
Employers and employees both benefit from a total compensation statement. For employers who strive to attract and retain top talent it will set them apart from other organizations. It will educate and inform employees about their entire compensation package which can in turn boost morale. And happy employees = happy employers.