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6525

Help Your Employees Appreciate Your Investment in Them

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 "Total compensation statements" have been around for many years and are
widely used by large employers. But they have become more accessible to smaller employers thanks to their availability online. The concept is simply to attach a dollar sign, where possible, to all the elements of compensation -- or even the entire "work experience," if you want to take it this far. Doing so may preclude a valued employee from jumping ship for a higher salary, only to realize that he's actually taking a pay cut when factoring in varying employer contributions to health and retirement benefits, among other items.

If the value of salary/wages, commissions and bonuses and basic employee

benefits were added up, the benefits portion typically falls between 30 and 40 percent of the total. Add in vacation time, statutory benefits and various programs you may be offering employees, and the total can easily exceed 40 percent.

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 Pulling together all those numbers can be pain-free if you have a basic human
resources information system (HRIS). If not, you may need to do some number-crunching. Once you have those numbers, you can plug them into a customizable template via a web-based service and pay as little as $1 per statement.

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Defining Compensation

How expansive should you be? The value of paid time off is certainly an
element of compensation that can be easily translated into dollars, and included in the statement. This can include holidays which are above and beyond the basic vacation package.

As noted, some employers also list statutory required benefits including your
contribution to employees' Social Security and Medicare benefits and unemployment benefits. While you have no choice in the matter, it's useful for employees to understand this element of your investment in them. www.hrp.net

 You can also throw in the value of traditional wellness and "financial
wellness" benefits, if you offer them. Professional training is yet another important benefit to include, with travel expense reimbursement if the training takes place at a distant location.

A typical statement will feature a grid showing what you contribute to each
element of compensation, and what the employee contributes. The employer-paid elements are toted up and identified as total compensation (see chart at bottom). Statements can feature a pie chart to provide a strong visual representation of the relative size of the different components of compensation. These statements can also be used to recap highlights of your benefit programs.

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Presenting to Employees

How should this information be presented to employees? Ideally, in a sitdown conversation between the employee and supervisor (or you), to highlight the importance of employees' understanding what you are investing in them, and why.

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 A good time to do that is in conjunction with an employee review. If, for

example, raises were not given out to many employees at that time, or only very modest ones, the benefit statement might reveal the total compensation rose by a greater percentage than the salary or wage component if, for example, your share of the employee's health benefits took a big jump.
This would be worth highlighting, of course.

Another approach is to present the statement following the benefits

enrollment period, if the effective date of the new benefit elections doesn't coincide with the employee's salary review cycle.

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 Some employers like to mail statements to married employees' homes, in

the hope it will increase the chances the employee will share it with his or her spouse. The assumption is, the spouse will react positively to the numbers. Otherwise, this tactic could backfire. Mailed statements should be accompanied by a letter from you, or have a message from you incorporated into the statement.

The most impersonal statement format, yet perhaps appropriate for some
employers -- assuming they have the right information systems in place -- is to have those numbers in the employee's private area of a portal, updated automatically as dollar values change.

A Google search under "total comprehensive statements" will identify several

companies which provide the service. You can scan those websites both for price and customizable statement examples.

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14550 Torrey Chase Blvd., Ste. 360 Houston, TX 77014 USA

Toll Free : 877.880.4477 Phone : 281.880.6525 Fax : 281.866.9426

E-mail : info@hrp.net

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