How Total Compensation Statements Can Benefit Your Business and Employees
Salary inquiries from employees or job candidates can be a minefield for employers. As a business owner, you know the value your employees are getting is much more than their baseline salary. Responding to salary inquiries with: “This role pays X amount of dollars” does not properly showcase the true value of a role, and doing so may beget your organization an incidental disservice. The truth is, if you’re responding to salary inquiries with a base salary figure, you’re not showcasing the total value of what you’re offering employees and potential candidates, and you’re missing a great opening to cultivate positive employee engagement.
Total Compensation Statements
A total compensation statement is a document with numerical and graphical information that shows a full breakdown of salary, benefits, and other rewards and includes both direct and indirect compensation. Direct compensation includes compensation that goes right into employee’s pockets, such as:
- Base salary
- Bonuses
- Commission
- Incentive pay
- Expense reimbursements
- Overtime
Indirect compensation includes compensation not directly paid to an employee, such as:
- Employer contributions to health plans
- Employer matches to 401K contributions or other retirement benefits
- Paid time off, such as vacation, personal days, holidays, and bereavement
- Learning and development opportunities
- Career advancement and professional development
- Life insurance
- Stock ownership
- Educational assistance or tuition remission
- Child care assistance
- Pet insurance
What Does a Total Compensation Statement Do for My Business?
Utilizing this progressive and informational tool can bring several benefits to your business. Some of the benefits of a total compensation statement include:
- Enhanced Employee-employer Engagement: The total compensation statement drives engagement and communication between employees and employers by showcasing the total value of the employee’s rewards.
- Empowering Employee Aspirations: It provides detailed information that can help hearten employees to achieve professional or financial goals.
- Fair Compensation Assurance: It assures employees that they are being awarded fairly for their efforts and creates transparent communication about how employers determine compensation.
- Accessible Self-service Information: Being a self-service tool that can provide answers to many questions employees may have about their benefits and compensation.
- Attracting Top Talent with Transparency: A total compensation statement provides an opportunity to also present transparent compensation to potential candidates and make your business stand out from the crowd for job seekers.
- Tracking Career Growth: Regularly provided total compensation statements can show employees their growth with the company and their potential trajectory over time.
Total Compensation Challenges and Opportunities
Total compensation statements, however, may present new challenges to business owners. But no worries, these challenges are opportunities to develop your organization’s brand and reputation. Let’s take a look at some of the challenges total compensation statements present and the opportunities that can arise from them:
Conclusion
Total compensation statements are extremely useful tools that can help you retain your top talent, improve your team’s overall morale and contentment, and provide a new level of education and transparency about how you compensate your employees. If you’re looking for a new way to boost your organization’s employee engagement, this tool might have a place at the top of your to-do list. If you need advice on implementing total compensation statements, reach out for more information on partnering with one of our Human Resources consultants.
