Issue: Employees too often see their base salary as their bottom-line compensation.
Risk: Without a clear view of their total compensation package, employees become disillusioned and seek greener pastures.
Action: Give employees the full picture with a "total compensation statement." Do it yourself or access one of the following vendors.
No doubt, you've heard departing employees who sign up for COBRA say "Boy, I never knew health insurance costs that much!"
Employees shouldn't have to wait until they're gone to realize that their compensation is actually far larger than their take-home pay. Many employees forget that employer-provided benefits make up a significant portion of their total compensation. Even worse, few have a clear picture of the actual market value of those benefits.
Solution: Prepare an annual total compensation statement for each employee that shows how much your organization really invests beyond wages.
By shedding light on this "hidden paycheck," you can improve employee morale and loyalty, which will ease turnover.
Contents of a 'total comp' statement
Your total compensation statement should contain all compensation, mandatory and voluntary, to which your organization contributes on behalf of employees, including:
- Health insurance coverage.
- Dental insurance coverage.
- Life insurance coverage.
- Short/long term disability.
- Workers' compensation contributions.
- Retirement plan contributions.
- Social security taxes.
- Unemployment taxes.
- Paid leave by category (i.e., vacation, sick leave, etc.), both accrued and used.
Keep the format as simple as possible. The statement should be easy to understand and interpret. End with a summary statement that specifies the total dollar value of all wages and benefits. In addition to raw numbers, use graphics to help employees visualize how compensation dollars are spent.
Do-it-yourself option: You can prepare statements for each employee using a spreadsheet program like Excel. Several vendors also offer software for preparing your own total compensation statements. One such vendor: Benefit Software.
Outsource option: Several outside vendors can take your compensation data and develop customized statements for each employee. Also, some payroll vendors will provide total compensation statements for their customers. Among the top vendors:
- Hay Group
- Charlton Consulting Group
- About Your Benefits, Inc.
- HR Consulting Group Inc.