To Retain Top Talent, Adopt Total Compensation Statements

Do your workers understand the full extent of the contributions you make to their financial security? While employees understand the cash compensation they receive each payday, studies show that few workers grasp just how much their employer pays into health insurance, pension plans, employer matches, group wellness plans, employee assistance plans and other costly workplace benefits. These plans are an important part of the total value package most employers offer to their workforce. Fortunately, an often overlooked tool can help close the perception gap: total compensation statements.

Background

According to a report from the Guardian Life Insurance Company of America, employees often miss out on needed benefits because of miscommunication. And employers miss a chance to cement the bond between employer and employee when they fail to communicate just how much it costs to have workers on the payroll.

Authors of the Guardian report recommend adopting total compensation statements as a standard practice. These statements don’t just list cash compensation, but also detail all the contributions and premiums paid by employers on behalf of workers. The purpose of the total compensation statement is to demonstrate to your workforce that their benefits go way beyond their net paychecks. So, if you’re hoping to retain your top talent, this nugget of information might help. Three out of four workers responding to a survey — also by Guardian Life —indicated that it was eye-opening to see the full extent of employer contributions to employee benefit plans, but only 30% of employers reported using total compensation statements on a regular basis.

Communication is Key

It’s not enough to stuff a total compensation statement into an envelope every month and forget about it. It’s important to reach employees across multiple lines of communication. This includes not only total compensation statements, but also in-service workshops by in-house instructors as well as benefits, vendors and other experts. In addition, you can use a company intranet, newsletters, email, brochures, posters and much more.

For best results, ensure your managers are trained on what compensation statements are and how to explain their importance to employees should employees go to them with any questions.

Enlist your Vendors

VonLehman HR Consultants would be happy to assist you with the tools and resources you need to get the message out to your work force. Benefits communication is most important when making changes or upgrades to your benefits package, but the effort should be ongoing, year-round. Contact VonLehman’s Human Resources Consulting Group at 800.887.0437 for guidance related to this topic.