By Margaret Hansen, JobsInNewYork.com
Looking for a recruiting and retention tool that you already have access to? Employees are keenly aware of how much money they make, but are they aware of their total compensation?
As much as 25 to 40 percent of one's total compensation is made up of benefit costs. Since employees don't often see this in their paycheck, they don't know their total non-cash compensation. Individual total compensation statements, if communicated correctly, can do wonders.
Why do it?
It Improves Employee Morale
With tough economic times still upon us, knowing one's actual compensation can be a warm pat on the back to employees who won't likely see a raise this year, or perhaps even next year.
Through understanding and awareness of the actual value of employer-provided benefits, employees can learn what the company has invested in them, reiterating that they are valuable assets.
It Increases Awareness of the Rising Cost of Healthcare
According to Families USA, a non-profit, non-partisan organization dedicated to high quality affordable healthcare for all Americans, family healthcare premiums have grown more than seven times faster than income in the past decade.
Everyone knows that healthcare is getting more and more expensive - even those with "good" coverage have noticed higher costs out of pocket. Not an easy thing to swallow when facing inflation at every turn, no raise at work and the possibility of a job loss in the family.
Letting your employees know how much you contribute to their health plan will assure them that everyone is paying more.
It Gives Employees a More Accurate Picture
They can use their total compensation statement as a tool to compare with other job offers. It might stop someone from leaving your company and taking a new job that seems to pay a little more. If they know all the details of their compensation, they can more accurately comparison shop for the best package. If you're providing all of the details, chances are, it's yours.
It Encourages Employees to Take Advantage of Your Benefit Programs
If you offer a 401(k) match, employees should know about it. It's free money for their retirement, if they participate.
It Creates a More Transparent Atmosphere with Open Communication
This can encourage top performers to stay with your company. Here's what Total Compensation statements can include:
- Actual pay (base salary, incentives, bonuses, overtime, etc.)
- Monetary value of time off
- Your share of:
- Health insurance coverage
- Life and disability insurance
- Retirement plan contributions
- Formula for figuring out value of income protection insurance
- Estimated tax savings from
- Flexible spending accounts
- Balances on
- Retirement accounts
- Investment plans
Educational Tool vs. Propaganda
Tread carefully. A poorly communicated total compensation campaign could be viewed as propaganda to discourage employees from asking for a raise. Instead, treat the program as an educational tool and be sure to thank employees for their service.
About the Author:
Margaret Hansen has been writing professionally since receiving a bachelor's degree in journalism from the University of Maine. She has worked for multiple organizations as a weekly newspaper reporter, a weekly newspaper editor, and in a variety of internal/external marketing communications roles. Her freelance career has focused on writing and editing for print, email and web publications in the employment industry, as well as manuscript editing and resume writing. Margaret has been affiliated with JobsInNewYork.com since 2003, most recently as the content manager/writer/editor for the company's award-winning employment-related newsletters.