Paychecks pay mortgages, buy food and make vacations possible.But what about the other parts of their compensation? For employees, these benefits are often overlooked and forgotten, and it’s up to employers to step in and remind employees of the full value of their compensation packages.
Total compensation statements are a great way to do so. They typically include the overall value of an employee’s financial rewards, medical benefits and less-tangible benefits like flexible work arrangements and continuing education opportunities.
Next to direct pay, benefit expenses are typically the second largest payroll expense. We call the value of these benefits the “hidden paycheck” because employees rarely think about what it costs their employer to provide. When employees see their statement that highlights this hidden paycheck they and their family can immediately see the whole value your company is providing them and their family.
Total compensation statements provide HR teams with an opportunity to communicate with employees about their benefits and to showcase just how much the company has invested in them. This has a number of positive effects, such as helping HR teams to attract, motivate and retain employees. In addition, total compensation statements:
- Keep employees updated on current compensation and benefits.
- Raises awareness and appreciation for the benefits your company offers.
- Reduces cost of benefits administration.
- Give employees a yearlong reference, taking some burden of HR.
Benefits of an online total compensation statement
Typically, total compensation statements are given to employees in a printed or digital format. Printed statements are great for employees who need something tangible to look at. They can create good will if managers hand them out to employees and it spurs conversations about how employees are valued. However, people are used to being able to access everything online, so we are seeing companies increasingly move towards digital total comp statements. Furthermore, online statements:
- Are dynamic (look great on any screen size) and interactive.
- Can be integrated with an online benefit platforms.
- Have engagement analytics, so you can gauge current successes and how to plan for the future.
- Can easily be updated and refreshed.
- Do not require resources and time to print and mail.
- Can include calls to action and other information to push employees to opt in to programs they are currently not taking advantage of.
Where to begin? A few best practices
Total compensation statements can be a big, time-consuming project that you may not have had time to tackle in a while (or ever). As you begin to think about rolling out a total compensation statement to your staff, you will want to consider the type of data to include, the design, go-live date and how to promote the statements.
1. Decide how you want to present the data to your employees. There are primarily two types of statements: retrospective and prospective. A retrospective statement provides a look back at the past. The time frame is usually a calendar year and these types of statements are delivered during Q1 or the beginning of Q2 on an annual basis. A prospective statement looks ahead to projected earnings in the calendar year. If you have a large sales team, this type of statement could be very motivating.
2. Update the data as often as possible. The more you provide employees with accurate data, the better. This is where online total compensation statements can be very handy. They can be updated weekly, monthly, quarterly or annually as needed whereas printed statements cannot be updated without having to re-issue new statements all the time.
4. Create statements that are visually appealing. This will increase the likelihood that the total compensation statement you are creating resonates with employees, and is actually read. We are visual creatures by nature – 90 percent of information transmitted to the brain is visual. Outside of work, your employees are viewing, engaging and interacting with content every day and expect the same type of content and experience at work. So, your statement should be visually appealing, easy to understand and flow from one section to the next – all aspects of a great design.
5. Communicate! Lastly, develop and roll out a communications campaign. Even if you have the best looking total compensation statement that has ever been created, it does not mean your employees will look at the statements or engage with them in any way if they don’t know why it’s important. You will need to roll out a communications campaign that announces the statement, how employees can view the statement and when they should expect them. The more you promote your total compensation statements the more employees will view their statements and engage with the messaging provided.
Jessica Foust is communications and marketing director at PlanSource.