For the first time in five years, HR pros who handle benefits are saying that is an even more important goal than cost control. The key to keeping good employees in your organization: Make sure they know the dollar value of their benefits packages.
Say a key employee quits to accept another job and cites poor benefits as a primary reason for leaving. But your benefits package isn’t really sub-par; the employee just never knew exactly what the package offered.
Advice: Regularly remind employees of the value of your benefits package by distributing total-compensation statements every six months. These personalized statements detail the employees’ salaries, plus the dollar value of each benefit you provide.
Organizations that communicate such information can boost loyalty and retention, even when their benefits aren’t the very best, says Frank Giancola, former manager of communications for Ford Motor Co.
“Because companies are so concerned about costs, helping employees appreciate the value of their benefits can be a feather in HR’s cap,” says Giancola.
Retention in a seller’s market
That’s more important now than ever. A new MetLife survey of 1,500 benefit decision-makers found that 55 percent rank retention as their top benefits goal—even higher than cost control.
“That’s a significant change,” says Ronald Leopold, MetLife VP of international business. “We’ve gone from a buyer’s market to a seller’s market where benefits are becoming a much more important lever to use in attracting the best talent and retaining people.”
Still, while 97 percent of HR and benefits execs believe total-comp statements increase employee appreciation of their benefits, more than half (55 percent) don’t provide the information, according to a Charlton Consulting Group survey.
How to create a statement
Total-comp statements can include dozens of categories of data, but the following areas mean the most to employees: company contributions to health, dental, vision and life insurance plans; ; paid time off and work/life programs; pension and 401(k) contributions; flexible spending account balances; long-term and short-term disability benefits; and payments to workers’ comp programs.
To make sure you’re providing complete and accurate information, form a total-compensation team headed by your HR department. The team should include representatives from the compensation, benefits, legal, IT, payroll and finance departments. Ask each department to provide their relevant information.
Final tip: It can be time-consuming to create total-comp statements in-house, especially if you’re an HR department of one. That’s one reason 40 percent of HR departments that provide such statements outsource all or part of the process, according to the Charlton survey.
If your firm has never provided total-comp statements, outsource it the first time. That helps you become familiar with how to produce them and what they should include.
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