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Flaunt Your Benefits with Total Compensation Statements

Flaunt Your Benefits with Total Compensation Statements

 

You’ve probably heard the expression “If you’ve got it, flaunt it.”

 

Companies offering good benefits packages should heed that advice and show employees the outstanding value they’re receiving. A great way to do this is through annual total compensation statements. Think of these statements as “hidden paychecks,” showing employees the full spectrum of their compensation.

 

What’s in a total compensation statement?

 

In an article on ThinkAdvisor (http://www.thinkadvisor.com/2013/08/23/show-your-employees-how-much-youre-really-paying-t), Securities America Financial Corp’s Kirk J. Hulett provides a good list of the items in a total compensation statement (we’ve compressed it here):

 

•    Work arrangement and hours

•    Base compensation

•    Bonus compensation

•    Salary/wages paid

•    Bonus paid

•    Mandatory employment-related taxes paid by employer (FICA, unemployment)

•    List of paid holidays and wage value, if employee is hourly

•    Number of personal days or hours, with wage value, if applicable

•    Medical insurance

•    Disability insurance

•    Life insurance

•    Retirement benefits

•    Training classes or college courses paid/provided by employer

•    Non-cash compensation (gifts, travel, meals, etc.)

 

Total compensation statements and rising health insurance costs

 

If your company provides health insurance, you’re surely aware of rising costs. And, of course, many businesses are worried the costs will only further increase under the Patient Protection and Affordable Care Act (aka Obamacare).

 

Since the percentage of the premium paid by covered workers has been relatively unchanged over the past decade—according to the Kaiser Family Foundation 2013 Employer Health Benefits Survey (http://kff.org/private-insurance/report/2013-employer-health-benefits/)—the medical insurance portion of total compensation has been increasing. Hat tip to David Janus of the Charlton Consulting Group for pointing this out in his Total Rewards Blog (http://totalrewards.charltonconsulting.com/?p=907).

 

As a result, even if employees haven’t received pay raises in recent years, they likely have seen an increase in their total compensation. But if they aren’t receiving a total compensation statement, they probably aren’t aware of an increase—or at least its magnitude. This is a lost opportunity for employers. As Hulett notes, employees who receive total compensation statements are often amazed by how “little perks” add up to a significant percentage of their actual pay—with the national average being 42 cents for every dollar of salary or wages. And the resulting appreciation can positively impact your company through increased engagement and retention.

 

How do I get total compensation statements for my employees?

 

It depends. For small companies with simple compensation and benefit structures, it might not be hard to create total compensation statements. Larger companies might be able to cull them together from the sources that handle their payroll, benefits, etc. Others turn to select HR software providers (such as BenefitWerks), using their solutions to quickly produce complete, accurate compensation statements.