On November 9-10, Paycor hosted its ninth HR Web Summit featuring sessions on a variety of topics ranging from Department of Labor, Form I-9 and EEO-1 Report compliance to common trends within the HR industry. The article below provides highlights from Lori Kleiman’s presentation on creating total compensation statements and why they can be beneficial for your organizations.
What is a total compensation statement?
A document showing an employee’s total compensation package – including all cash income and the value of benefits received. The total compensation statement is often referred to as a hidden paycheck because most employees focus on their NET pay and forget or underestimate the value of their benefit package.
Why create total compensation statements?
The total compensation statement should demonstrate to your employees the value of working at your organization. Organizations want their employees to truly understand all of the benefits they are providing as an employer, and this document can capture all of the great benefits you provide to employees. Treat the total compensation statement as a positive communication tool that you can use to keep employees updated on their current compensation and benefits.
Before creating a total compensation statement, Lori often asks employers about their purpose in creating the information. In her experience, employers often create total compensation statements as retention tools to show employees the overall value the organization offers, beyond just the paycheck. Compensation is much broader than the wages an employee receives in their position. She encourages that employers evaluate all of the perks offered to employees, like:
• Base pay
• Bonus and commissions
• Government mandated benefits
• Voluntary benefits
• Stock valuations
• Other non-monetary benefits
According to a survey Lori presented during the session, approximately 90% of employees have developed a higher appreciation for the value of their employer-paid benefits after receiving total compensation statements.
To increase the likelihood that the total compensation statement you are creating resonates with your employees, Lori recommended these tips:
• Make it engaging so employees will want to interact with the information – the statement should be visually appealing, easy to understand and flow from one section to the next.
• The statement should be customized so it has the same look and feel as other documents your organization provides to employees.
• Data assembly is the most critical part of the process. To create a total snapshot, ensure that you work with departments across your organization to gather the necessary data you want to communicate.
• Consider using charts and graphs to easily convey data.
• Mail the document to your employee so their spouse or family can see the information. In Lori’s experience, employees sometimes leave a job because their family or spouse says that the employer does not do enough for the employee. By mailing them to the home, you are engaging the entire family in the process.
• When mailing out the document, make sure the envelope is branded. If employees see a return address from your company, they will open it. This will eliminate the document being confused for junk mail.
As an HR professional, creating a total compensation statement can demonstrate to leadership the ways in which you are adding value to all of the programs and projects your team is responsible for. It can also serve as a critical component to help you win the war for talent by communicating with your employees all of the great benefits you offer to support them.
Paycor’s Reporting & Analytics solution allows you to see total compensation for each employee, including wages, benefits and taxes. When employees understand you value them, they are more likely to go the extra mile for you. Being transparent about the investment you have made in their total compensation is an easy way to show your appreciation for their dedication and hard work. Contact us to learn more about Paycor’s Reporting & Analytics, and start reaping the bottom-line benefits of higher engagement and retention.
Click here to listen to the entire recorded webinar, and be sure to check out a full list of Paycor’s upcoming Coffee Break webinar topics for tips and best practices to support and engage your people.
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