Although your benefits package may be substantial, your employees might not know it or might not understand some of the benefits you offer. Total compensation statements demonstrate to employees the monetary value you are providing beyond the standard paycheck.
A total compensation statement includes the monetary cost of all forms of compensation on the part of the employer. This includes gross wages and extra financial compensation, such as bonuses or commissions, as well as the employer-paid portion of retirement plan contributions, insurance premiums, less-tangible benefits like flexible work arrangements and continuing education opportunities, and even other benefits such as dry cleaning services.
Following are items that might be listed on a total compensation statement:
- Salary/hourly wages
- Stock options
- Stock grants
- Employee stock purchase plan
- Retirement plan—401(k) matching contributions, pension plans, etc.
- Educational or employee assistance programs
- Social Security contributions
- Paid time off—including vacation time, sick leave, holidays, jury duty, etc.
- Insurance—including health, dental, vision, life, disability, etc.
- Wellness rewards—discounts, cash bonuses, etc.
- Relocation expenses
Benefits of Total Compensation Statements
Seeing the total cost of all benefits can be an eye-opening experience for your workforce. When provided, these statements can:
- Increase employee awareness and appreciation of all the benefits your company offers
- Increase understanding of the cost of benefits and the investment being made in employees
- Raise morale and improve retention rates
- Encourage and enlighten potential employees during the recruitment process
- Act as a yearlong reference for employees, reducing benefits administration cost
Providing the Information
Offering total compensation statements is voluntary. If you decide to offer them, allot time to compile the value of two types of compensation:
- Direct compensation – compensation paid directly to an employee, such as the employee’s salary
- Indirect compensation – any forms of compensation not paid directly to an employee, such as employer-paid insurance premiums, retirement benefits and paid time off
Contact your Hylant service team member or local Hylant office to learn more about total compensation statements.